Master Circular - allied activities- entry into insurance business, issue of credit card and marketing and distribution of certain products - ആർബിഐ - Reserve Bank of India
Master Circular - allied activities- entry into insurance business, issue of credit card and marketing and distribution of certain products
RBI/2009-10/16 July 1, 2009 To All Non-Banking Financial Companies (NBFCs) Dear Sir, Master Circular - allied activities- entry into insurance business, issue of credit card and marketing and distribution of certain products In order to have all current instructions in one place, the Reserve Bank of India has consolidated all the instructions issued on the topic as at end of June 30, 2009. It may be noted that the Master Circular consolidates and updates all the instructions contained in the notifications listed in the Appendix in so far they relate to the subject. The Master Circular has also been placed on the RBI web-site (http://www.rbi.org.in). Yours sincerely (P. Krishnamurthy)
Entry into Insurance Business
In the statement of Monetary and Credit Policy for the year 2000-2001 announced by our Governor on April 27, 2000 it was indicated, inter alia, that the guidelines for entry of NBFCs into insurance business would be announced. Accordingly, the Bank issued on June9, 2000 the final guidelines after taking into account the views/suggestions/comments of the market participants as given below. The aspirant NBFCs are advised to make an application along with necessary particulars duly certified by their statutory auditors to the Regional Office of Department of Non-Banking Supervision under whose jurisdiction the registered office of the NBFCs is situated. (a) NBFCs registered with Reserve Bank of India may take up insurance agency business on fee basis and without risk participation, without the approval of Reserve Bank of India subject to the certain conditions; All NBFCs registered with RBI entering into insurance business as investors or on risk participation basis will be required to obtain prior approval of the Reserve Bank. The Reserve Bank will give permission to NBFCs on case to case basis keeping in view all relevant factors. It should be ensured that risks involved in insurance business do not get transferred to the NBFC and that the NBFC business does not get contaminated by any risks which may arise from insurance business. [Details in DNBS.(PD).CC. No. 13 /02.01/99-2000 dated June 30, 2000, DNBS(PD).CC.No.18/02.01/2001-02 dated January 1, 2002 read with DNBS (PD) C.C. No. 35 / 10.24 / 2003-04 dated February 10, 2004] Issue of Credit card 3. NBFCs are not allowed to undertake credit card business without prior approval of Reserve Bank of India. In regard to credit card business, it is clarified that any company including a non-deposit taking company intending to engage in this activity requires a Certificate of Registration, apart from specific permission to enter into this business, the pre-requisite for which is a minimum net owned fund of Rs.100 crore and subject to such terms and conditions as the Bank may specify in this behalf from time to time. NBFCs are not permitted to issue debit cards, smart cards, stored value cards, charge cards, etc. as advised explicitly in February 21, 2005. Further, NBFCs have to comply also with the instructions issued by Bank to commercial banks vide DBOD.FSD.BC. 49/ 24.01.011/ 2005-06 dated November 21, 2005 . [Details in DNBS (PD) C.C. No. 41 /10.27 / 2004-05 dated July 7, 2004, DBOD.FSD.BC.49/ 24.01.011/ 2005-06 dated November 21, 2005] Issue of Co-branded Credit Cards [Details in DNBS (PD) CC No. 83 / 03.10.27 / 2006-07 dated December 04, 2006] Distribution of Mutual Fund products by NBFCs
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