Master Circular - “Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998” - ਆਰਬੀਆਈ - Reserve Bank of India
Master Circular - “Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998”
RBI/2007-2008/01 July 2, 2007 To The Chairman/CEOs of all Non-Banking Financial Companies Dear Sir, Master Circular – “Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998” The directions on acceptance of public deposits by Non-Banking Financial Companies were issued by Reserve Bank of India on January 31, 1998, vide Notification No.DFC.118 / DG (SPT)-98. The said Notification duly updated as on June 30, 2007 is reproduced below. Yours faithfully, (P. Krishnamurthy) RESERVE BANK OF INDIA Notification No.DFC.118/DG (SPT)-98 dated January 31, 1998 The Reserve Bank of India having considered it necessary in the public interest and being satisfied that for the purpose of enabling the Bank to regulate the credit system to the advantage of the country, it is necessary to give the directions set out below, hereby, in exercise of the powers conferred by sections 45J, 45K, 45L and 45MA of the Reserve Bank of India Act, 1934 (2 of 1934) and of all the powers enabling it in this behalf, and in supersession of the earlier directions contained in Notification No.DFC.114/DG(SPT)-98 dated January 2, 1998 gives to every non-banking financial company the directions hereinafter specified. PART I - PRELIMINARY Short title and commencement of the directions 1. These directions shall be known as the “Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998”. They shall come into force with effect from January 31, 1998 and any reference in these directions to the date of commencement thereof shall be deemed to be a reference to that date. Definitions 2. (1) For the purpose of these directions, unless the context otherwise requires, - (ia) “Asset Finance Company” means any company which is a financial institution carrying on as its principal business the financing of physical assets supporting productive / economic activity, such as automobiles, tractors, lathe machines, generator sets, earth moving and material handling equipments, moving on own power and general purpose industrial machines. (i) “depositor“ means any person who has made a deposit with a company; or a (ii) Deleted (iii) “free reserves“ means the aggregate of the balance in the share premium account, capital and debenture redemption reserves and any other reserve shown or published in the balance sheet of a company and created through an allocation of profits not being a reserve created for repayment of any future liability or for depreciation in assets or for bad debts or a reserve created by revaluation of the assets of the company; (iv) Deleted (v) “insurance company“ means any company registered under section 3 of the Insurance Act, 1938 (4 of 1938); (vi) “investment company“ means any company which is a financial institution carrying on as its principal business the acquisition of securities; (vii) “lending public financial institution” means - (viii) “loan company“ means any company which is a financial institution carrying on as its principal business the providing of finance whether by making loans or advances or otherwise for any activity other than its own but does not include an Asset Finance Company. (ix) “mutual benefit financial company“ means any company which is a financial institution notified by the Central Government under section 620A of the Companies Act, 1956 (1 of 1956); [(ixa) “mutual benefit company” means a company not notified under section 620A of the Companies Act, 1956 (1 of 1956) and carrying on the business of a non-banking financial institution, - (x)`net owned fund’ means net owned fund as defined under section 45-IA of the Reserve Bank of India Act, 1934 (2 of 1934) including the paid up preference shares which are compulsorily convertible into equity ; (xi) “non-banking financial company” means only the non-banking institution which is a loan company or an investment company or an asset finance company or a mutual benefit financial company; (xii) `public deposit’, means a deposit as defined under section 45 I(bb) of the Reserve Bank of India Act, 1934 (2 of 1934) excluding the following : (a) any amount received from the Central Government or a State Government or any amount received from any other source and whose repayment is guaranteed by the Central Government or a State Government or any amount received from a local authority or a foreign Government or any other foreign citizen, authority or person; (c) any amount received by a company from any other company; Provided that the director or shareholder, as the case may be, from whom the money is received furnishes to the company at the time of giving the money, a declaration in writing to the effect that the amount is not being given out of funds acquired by him by borrowing or accepting from others; 7[provided further, that in the case of joint shareholders of a private company, monies received from or in the name of the joint shareholders except the first named shareholder shall not be eligible to be treated as the receipt of money from the shareholder of the company ;] (f) any amount raised by the issue of bonds or debentures secured by the mortgage of any immovable property of the company; or by any other asset or with an option to convert them into shares in the company provided that in the case of such bonds or debentures secured by the mortgage of any immovable property or secured by other assets, the amount of such bonds or debentures shall not exceed the market value of such immovable property/other assets; 8[(h) any amount received from a Mutual Fund which is governed by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996; ] 9[(i) any amount received as hybrid debt or subordinated debt the minimum maturity period of which is not less than sixty months;] 10[(j) any amount received from a relative of a director of an NBFC Note : The deposit shall be accepted only on an application made by the depositor containing therein that as on the date of deposit, he is related to the specific director in the capacity of a relative as defined under Companies Act, 1956 (1 of 1956).] 11[(k) any amount received by issuance of commercial paper, in accordance with the guidelines issued by the Bank, vide Circular No. IECD.3/08.15.01/2000-2001 dated October 10, 2000]; (xiii) “securities“ means securities as defined in section 2(h) of the Securities Contracts (Regulation) Act, 1956 (42 of 1956); (xiv) “stock broking company” means a company doing the business of a stock-broker or sub-broker holding a valid certificate of registration obtained under section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992); and (xv) “stock exchange” means a company recognised as a stock exchange under section 4 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956). (2) Words or expressions used but not defined herein and defined in the Reserve Bank of India Act, 1934 (2 of 1934) or in the Companies Act, 1956 (Act No.1 of 1956) [or Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 1998 or the Residuary Non-Banking Companies (Reserve Bank) Directions, 1987] shall have the same meaning as assigned to them in those Acts. (3) (i) If any question arises as to whether a company is a financial institution or not, such question shall be decided by the Reserve Bank of India in consultation with the Central Government and such decision shall be final and be binding on all the parties concerned. NOTE : Deleted14 PART II - ACCEPTANCE OF PUBLIC DEPOSITS Restrictions on acceptance of public deposits 3. (1) On and from January 31, 1998, no mutual benefit financial company 15 [or mutual benefit company shall] , (2) [The provisions contained in paragraph 4 except sub-paragraphs (7), (15) and (16) and paragraphs 5, 6 and 8 of these directions shall not apply to a Mutual Benefit Financial Company and a Mutual Benefit Company.]16. Restrictions on acceptance of public deposits 4. Minimum Credit Rating (1) On and from January 31, 1998, - 17[Provided that this clause shall not apply to an Asset Finance Company referred to in clause (a) of sub-paragraph (4) hereunder;]. Approved Credit Rating Agencies The names of approved credit rating agencies and the minimum credit rating shall be as follows:- Name of the agency Minimum investment Prohibition from accepting demand deposit (2) On and from January 31, 1998, no non-banking financial company shall accept or renew any public deposit whether accepted before or after January 31, 1998, which is repayable on demand. Period of Public Deposit (3) On and from January 31, 1998, no non-banking financial company shall accept or renew any public deposit whether accepted before or after January 31, 1998 unless such deposit is repayable after a period of twelve months but not later than sixty months from the date of acceptance or renewal thereof. (4) Ceiling on quantum of deposit Asset Finance Company (AFC)21 No asset finance company or loan company or investment company shall, accept or renew public deposit except as provided hereunder - AFC23 (a) An asset finance company24 - (ii) complying with all the prudential norms with capital adequacy ratio of not less than fifteen percent as per last audited balance-sheet, may, accept or renew public deposit, together with the amounts remaining outstanding in the books of the company as on the date of acceptance or renewal of such deposit, not exceeding one and one-half times of its NOF or public deposit up to ten crore of rupees, whichever is lower. (i) having NOF of twenty five lakh of rupees or more; (iii) having minimum investment grade credit rating, may, accept or renew public deposit, together with the amounts remaining outstanding in the books of the company as on the date of acceptance or renewal of such deposit, not exceeding four times of its NOF. (i) having NOF of twenty five lakh of rupees or more; may, accept or renew public deposit, together with the amounts remaining outstanding in the books of the company as on the date of acceptance or renewal of such deposit, not exceeding one and one-half times of its NOF: Provided that a loan company or an investment company which is complying with all the above conditions and having, as on the date of its coming into force of these directions, AAA (triple A) grade credit rating but not having capital adequacy ratio of fifteen percent may, so long it continues to maintain the same position of its credit rating, accept or renew public deposit only up to the extent of not exceeding the amount outstanding as at the close of business on December 18, 1998 or one and one-half time of its NOF, whichever is more, and shall bring down its public deposit to the level as specified in paragraph 4(6) of the directions and also attain the capital adequacy ratio of fifteen percent before March 31, 2000. (d) A loan company or an investment company which complies with all the prudential norms and having, as on the date of coming into force of these directions – (i) NOF of twenty five lakh of rupees or more; and (ii) AA (double A) grade credit rating; but not having capital adequacy ratio of fifteen percent or above as per last audited balance-sheet, may, so long it continues to maintain the same position of its credit rating, accept or renew the public deposit together with the amounts outstanding in the books of the company on the date of acceptance or renewal of such deposit, not exceeding an amount equivalent to its NOF until it attains the capital adequacy ratio of fifteen percent but not later than March 31, 2000 (as per audited balance-sheet) with other stipulations remaining the same. (e) A loan company or an investment company which complies with all the prudential norms and having, as on the date of coming into force of these directions – (i) NOF of twenty five lakh of rupees or more; and may, so long it continues to maintain the same position of its credit rating, accept or renew the public deposit, together with the amounts outstanding in the books of the company as on the date of acceptance or renewal of such deposit not exceeding an amount equivalent to one-half of its NOF until it attains the capital adequacy ratio of fifteen percent but not later than March 31, 2000 (as per audited balance-sheet) with other stipulations remaining the same. Downgrading of Credit Rating (5) In the event of downgrading of credit rating below the minimum specified investment grade as provided for in paragraph 4(4), a non-banking financial company shall regularise the excess deposit as provided hereunder : AFC26 (a) with immediate effect, stop accepting public deposit, if it is already holding public deposit to the extent permissible under sub-clause (b) of paragraph 4(4) above; (b) report the position within fifteen working days to the Reserve Bank of India; and LC/IC (ii) A loan company or an investment company shall, (a) with immediate effect, stop accepting public deposit; Regularisation of the public deposits accepted (i) stop accepting public deposit; and (ii) reduce, before December 31, 2001, the amount of excess public deposit to nil or the appropriate extent permissible under sub-clause (d) or (e) of paragraph 4(4) above as the case may be, by repayment as and when such deposit falls due or otherwise. Note : Ceiling on the rate of interest 29[((7) On and from April 24, 2007, no non-banking financial company shall invite or accept or renew public deposit at a rate of interest exceeding twelve and half per cent per annum. Interest may be paid or compounded at rests which shall not be shorter than monthly rests.] 30[(7A) On and from September 18, 2003, no non-banking financial company shall invite or accept or renew repatriable deposits from Non-Resident Indians in terms of Notification No.FEMA.5/2000-RB dated May 3, 2000 under Non-Resident (External) Account Scheme at a rate exceeding the rate specified by the Reserve Bank of India for such deposits with scheduled commercial banks. Explanation The period of above deposits shall be not less than one year and not more than three years.] Payment of brokerage (8) On and from January 31, 1998 no non-banking financial company shall pay to any broker on public deposit collected by or through him, - (i) brokerage, commission, incentive or any other benefit by whatever name called, in excess of two per cent of the deposit so collected; and 31[Intimation of maturity of deposits to depositors (8A) It shall be the obligation of the non-banking financial company to intimate the details of maturity of the deposit to the depositor at least two months before the date of maturity of the deposit.” ] Renewal of public deposit (9) Where a non-banking financial company permits an existing depositor to renew the deposit before maturity for availing of the benefit of higher rate of interest, such company shall pay the depositor the increase in the rate of interest provided that, - (i) the deposit is renewed in accordance with the other provisions of these directions and for a period longer than the remaining period of the original contract; and (ii) the interest on the expired period of the deposit is reduced by one percentage point from the rate which the company would have ordinarily paid, had the deposit been accepted for the period for which such deposit had run; any interest paid earlier in excess of such reduced rate is recovered/adjusted. Payment of interest on overdue public deposits (10) A non-banking financial company may, at its discretion, allow interest on an overdue public deposit or a portion of the said overdue deposit from the date of maturity of the deposit subject to the conditions that: (i) the total amount of overdue deposit or the part thereof is renewed in accordance with other relevant provisions of these directions, from the date of its maturity till some future date; and (ii) the interest allowed shall be at the appropriate rate operative on the date of maturity of such overdue deposit which shall be payable only on the amount of deposit so renewed : Provided that where a non-banking financial company fails to repay the deposit along with interest on maturity on the claim made by the depositor, the non-banking financial company shall be liable to pay interest from the date of claim till the date of repayment at the rate as applicable to the deposit. Joint deposit (11) Where so desired, deposits may be accepted in joint names with or without any of the clauses, namely, "Either or Survivor", "Number One or Survivor/s", "Anyone or Survivor/s". Particulars to be specified in application (12) (i) On and from January 31, 1998, no non-banking financial company shall accept or renew any public deposit except on a written application from the depositor in the form to be supplied by the company, which form shall contain all the particulars specified in the Non-Banking Financial Companies and Miscellaneous Non-Banking Companies (Advertisement) Rules, 1977, made under section 58A of the Companies Act, 1956 (1 of 1956) and also contain the specific category of the depositor, i.e. whether the depositor is a shareholder or a director or a promoter of the company or a member of public. (a) the credit rating assigned for its fixed deposit and the name of the credit rating agency which rated the company or a statement from the management if it is an asset finance company32 that, the quantum of public deposit held by it is not exceeding one and one-half times of its NOF or not exceeding rupees ten crore whichever is less; Give here the full address of the Bench of the Company Law Board under whose jurisdiction the registered office of the company is located; (c) in case of any deficiency of the company in servicing its deposit, the depositor may approach the National Consumers Disputes Redressal Forum, the State Level Consumers Disputes Redressal Forum or the District Level Consumers Disputes Redressal Forum for relief; (d) a statement that the financial position of the company as disclosed and the representations made in the application form are true and correct and that the company and its Board of Directors are responsible for the correctness and veracity thereof; (f) at the end of application form but before the signature of the depositor, the following verification clause by the depositor should be appended: “I have gone through the financials and other statements / particulars / representations furnished / made by the company and after careful consideration I am making the deposit with the company at my own risk and volition”. 33[(g) the information relating to and the aggregate dues from the facilities, both fund and non-fund based, extended to, and the aggregate dues from companies in the same group or other entities or business ventures in which the directors and / or the non-banking financial company are holding substantial interest and the total amount of exposure to such entities.] 34[(iii) Every non-banking financial company shall obtain proper introduction of the new depositors before opening their accounts and accepting the deposits and keep on its record the evidence which it has relied upon for the purpose of such introduction.] Advertisement and statement in lieu of advertisement: (13) (i) Every non-banking financial company soliciting public deposit shall comply with the provisions of the Non-Banking Financial Companies and Miscellaneous Non-Banking Companies (Advertisement) Rules, 1977 and shall also specify in every advertisement to be issued thereunder, the following :- (b) the mode of repayment of deposit; (d) the interest payable on deposit; 35[(h) the information, relating to the aggregate dues (including the non-fund based facilities provided to) from companies in the same group or other entities or business ventures in which, the directors and/or the NBFC are holding substantial interest and the total amount of exposure to such entities; and] 36[(i) that the deposits solicited by it are not insured. ] 37[13 (i) (A) Where an NBFC displays any advertisement in electronic media such as TV, even without soliciting deposits, it should incorporate a caption/band in such advertisements indicating the following: The company is having a valid Certificate of Registration dated _______ issued by the Reserve Bank of India under section 45-IA of the Reserve Bank of India Act, 1934. However, the Reserve Bank of India does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.] General provisions regarding repayment of public deposit 38[On and from and October 5, 2004 Minimum lock- in period and (14)(i) No non-banking financial company shall grant any loan against a public deposit or make premature repayment of a public deposit within a period of three months (lock-in period) from the date of its acceptance: Provided that in the event of death of a depositor, a non-banking financial company may repay the public deposit prematurely, even within the lock – in period, to the surviving depositor/s in the case of joint holding with survivor clause, or to the nominee or the legal heir/s of the deceased depositor, on the request of the surviving depositor/s/nominee/legal heir, and only against submission of proof of death, to the satisfaction of the company. Repayment of public deposits by a (ii) Subject to the provisions contained in sub-paragraph (i), a non-banking financial company not being a problem Non-Banking Financial Company may, (a) with effect from October 5, 2004, permit premature repayment of a public deposit at its sole discretion: Provided that in the case of a deposit accepted prior to the aforesaid date, such non-banking financial company may, if so permitted by the terms and conditions of acceptance of such deposit, repay it prematurely at the request of the depositor, after the expiry of three months from the date of deposit; (b) grant a loan up to seventy-five percent of the amount of public deposit to a depositor after the expiry of three months from the date of deposit at a rate of interest two percentage points above the interest rate payable on the deposit. Repayment of public deposits by a problem (iii) Subject to the provisions contained in sub-paragraph (i), in order to enable a depositor to meet expenses of an emergent nature, a problem non-banking financial company may make premature repayment of, or grant a loan against, a public deposit in the following cases only, namely: (a) repay a tiny deposit in entirety or repay any other public deposit up to an amount not exceeding Rs. 10,000/-; or (b) grant a loan against a tiny deposit or up to an amount not exceeding Rs. 10,000/- against any other deposit, at a rate of interest two percentage points above the interest rate payable on the deposit. 39[Clubbing of deposits by a problem non-banking financial company (iv) All deposit accounts standing to the credit of sole/first named depositor in the same capacity shall be clubbed and treated as one deposit account for the purpose of premature repayment or grant of loan by a problem non-banking financial company; Provided that this clause shall not apply to premature repayment in the event of death of depositor as provided in sub-paragraph (i).] Rate of interest on premature repayment of public deposits (v) Where a non-banking financial company, whether at its sole discretion or at the request of the depositor, as the case may be, repays a public deposit after three months from the date of its acceptance, but before its maturity (including premature repayment in the case of death of the depositor), it shall pay interest at the following rates:
Explanation: For the purpose of this paragraph, (a) `problem non-banking financial company’ means a non-banking financial company which - (i) has refused or failed to meet within five working days any lawful demand for repayment of the matured public deposits ; or (ii) intimates the CLB under section 58AA of the Companies Act, 1956, about its default to a small depositor in repayment of any public deposit or part thereof or any interest thereupon; or (iii) approaches the Bank for withdrawal of the liquid asset securities to meet its deposit obligations; or (iv) approaches the Bank for any relief or relaxation or exemption from the provisions of Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998 or from that of Prudential Norms for avoiding default in meeting public deposit or other obligations; or (v) has been identified by the Bank to be a problem non-banking financial company either suo moto or based on the complaints from the depositors about non-repayment of public deposits or on complaints from the company’s lenders about non-payment of dues. (b) ‘tiny deposit’ means the aggregate amount of public deposits not exceeding Rs. 10,000/- standing in the name of the sole or the first named depositor in the same capacity in all the branches of the non-banking financial company.”] Furnishing of receipt to depositor 15)(i) Every non-banking financial company shall furnish to every depositor or his agent or group of joint depositors, a receipt for every amount received by the company by way of deposit. (ii) The said receipt shall be duly signed by an officer authorised by the company in that behalf and shall state the date of deposit, the name of the depositor, the amount in words and figures received by the company by way of deposit, rate of interest payable thereon and the date on which the deposit is repayable : Provided that, if such receipts pertain to instalments subsequent to the first instalment of a recurring deposit it may contain only name of the depositor and date and amount of deposit. Register of deposit (16)(i) Every non-banking financial company shall keep one or more registers in respect of all deposits in which shall be entered separately in the case of each depositor the following particulars, namely - (a) name and address of the depositor, (b) date and amount of each deposit, (c) duration and the due date of each deposit, (d) date and amount of accrued interest or premium on each deposit, (e) date of claim made by the depositor, (f) date and amount of each repayment, whether of principal, interest or premium, (g) the reasons for delay in repayment beyond five working days and (ii) The register or registers aforesaid shall be kept at each branch in respect of the deposit accounts opened by that branch of the company and a consolidated register for all the branches taken together at the registered office of the company and shall be preserved in good order for a period of not less than eight calendar years following the financial year in which the latest entry is made of the repayment or renewal of any deposit of which particulars are contained in the register: 40[4A. Branches and appointment of agents to collect deposits On and from January 13, 2000, no non-banking financial company shall open its branch or appoint agents to collect deposits except as provided hereunder : (a) NOF is up to Rs. 50 crore Within the State where (b) NOF is more than Rs. 50 crore and Anywhere in India (ii) (a) for the purpose of opening a branch, a non-banking financial company shall notify to the Reserve Bank of its intention to open the proposed branch; (b) on receipt of such advice, the Reserve Bank may, on being satisfied that in the public interest or in the interest of the concerned non-banking financial company or for any other relevant reasons to be recorded, reject the proposal and communicate the same to the non-banking financial company; (c) if no advice of rejection of the proposal under (b) above is communicated by the Reserve Bank within 30 days from the receipt of such advice, the non-banking financial company may proceed with its proposal. PART III - SPECIAL PROVISIONS Information to be included in the Board's report 5. (1) In every report of the Board of Directors laid before the company in a general meeting under sub-section (1) of section 217 of the Companies Act, 1956 (1 of 1956), there shall be included in the case of a non-banking financial company, the following particulars or information, namely :- (ii) the total amounts due under such accounts remaining unclaimed or unpaid beyond the dates referred to in clause (i) as aforesaid. (2) The said particulars or information shall be furnished with reference to the position as on the last day of the financial year to which the report relates and if the amounts remaining unclaimed or undisbursed as referred to in clause (ii) of the preceding sub-paragraph exceed in the aggregate a sum of rupees five lakhs, there shall also be included in the report a statement on the steps taken or proposed to be taken by the Board of Directors for the repayment of the amounts due to the depositors remaining unclaimed or undisbursed. Safe custody of approved securities 41[6. (1) every non-banking financial company shall - (i) open a Constituent's Subsidiary General Ledger (CSGL) account with a scheduled commercial bank, or the Stock Holding Corporation of India Ltd. (SHCIL) or a dematerialized account with a depository through a depository participant registered with the Securities and Exchange Board of India and keep the unencumbered approved securities required to be maintained by it in pursuance of Section 45-IB of the Reserve Bank of India Act, 1934 (2 of 1934) and the Notification No. DFC.121/ ED(G)-98 dated January 31, 1998 in such CSGL account or dematerialised account; and intimate the name and address of such scheduled commercial bank where it has opened its CSGL account or has held the securities in physical form, or the location of the SHCIL where it has opened its CSGL account or has held the securities in physical form or the depository (and the depository participant) where it has held its dematerialised account, in writing, to the Regional Office of the Reserve Bank of India under whose jurisdiction the registered office of the company is situated, as specified in Second Schedule hereto: Provided that where a non-banking financial company intends to entrust the securities specified in clause (ii) above with the designated banker or SHCIL, at a place other than the place at which its registered office is located, it may do so with the prior approval, in writing, of the Regional Office of the Reserve Bank of India under whose jurisdiction the registered office of the company is situated, as specified in Second Schedule hereto:] 42[Provided further that the government securities held in the said CSGL account or dematerialised account, shall not be traded, either by entering into ready forward contracts, including reverse ready forward contracts, or otherwise, except, by following the procedure and to the extent, as hereinafter specified.] 43[(2) The securities mentioned in sub-paragraph (1) above shall continue to be kept as specified therein for the benefit of the depositors and shall not be withdrawn or encashed or otherwise dealt with by the non-banking financial company except for repayment to the depositors with the prior approval of Reserve Bank of India : Provided that, 45[(3) Where the non-banking financial company intends to trade, either by entering into ready forward contracts, including reverse ready forward contracts, or otherwise, in the government securities that are held in excess of the requirement under Section 45-IB of the Act and Notification No. DFC. 121/ED (G)-98 dated January 31, 1998, the same may be undertaken by opening a separate CSGL or dematerialised account for keeping such excess government securities.] Employees Security Deposit 7. A non-banking financial company receiving any amount in the ordinary course of its business as security deposit from any of its employees for due performance of his duties shall keep such amount in an account with a scheduled commercial bank or in a post office in the joint names of the employee and the company on the conditions that - Copies of balance sheet and accounts together with 8. (1) Every non-banking financial company accepting/holding public deposit shall deliver to the Reserve Bank of India an audited balance sheet as on the last date of each financial year and an audited profit and loss account in respect of that year as passed by the company in general meeting together with a copy of the report of the Board of Directors laid before the company in such meeting in terms of section 217(1) of the Companies Act, 1956 (1 of 1956) within fifteen days of such meeting as also a copy of the report and the notes on accounts furnished by its Auditor. Provision for submitting Auditor's Certificate (2) Every non-banking financial company holding/accepting public deposits shall furnish to the Reserve Bank of India along with a copy of the audited balance sheet as provided in sub-paragraph (1) above, a copy of the Auditor’s report to the Board of Directors and a certificate from its auditor, to the effect that the full amount of liabilities to the depositors of the company, including interest payable thereon, are properly reflected in the balance sheet, and that the company is in a position to meet the amount of such liabilities to the depositors. Returns to be submitted to the Reserve Bank of India (3) Every non-banking financial company holding/accepting public deposits shall submit to the Reserve Bank of India a return furnishing the information specified in the First Schedule hereto, with reference to its financial position as on the date specified in the said Schedule. (4) Every non-banking financial company shall, not later than one month from the occurrence of any change in the following matters, shall intimate to the Reserve Bank of India: (i) the complete postal address, telephone number/s and fax number/s of the registered/corporate office; (iv) the specimen signatures of the officers authorised to sign on (v) the names and office address of the auditors of the company. Balance sheet, returns, etc. to be submitted (5) Any balance sheets, returns or information or intimation or statement required to be submitted or furnished to the Reserve Bank of India in pursuance of these directions shall be submitted or furnished to the Regional Office of the Department of Non-Banking Supervision of the Reserve Bank of India within whose jurisdiction the registered office of the company is situated, as specified in the Second Schedule hereto. Non-applicability of the Directions to certain 9. Nothing contained in paragraphs 4 to 8 of these directions shall be applicable to: (2) a loan company, an investment company, an asset finance company46 not accepting/holding any public deposit: Provided that the company passes in the meeting of its board of directors within thirty days of the issue of these directions and thereafter within thirty days of the commencement of the next financial year and each subsequent financial year, a resolution to the effect that the company has neither accepted public deposit nor would accept any public deposit during the year. (3) an investment company, (ii) which does not trade in such shares/securities; and (iii) which does not accept/hold any public deposit : Provided that the company passes in the meeting of its board of directors within thirty days of the issue of these directions and thereafter within thirty days of the commencement of each subsequent financial year a resolution to the effect that the company has invested or would invest/hold its investments in the shares/securities of its group/holding/subsidiary companies of not less than 90 per cent of its assets and (name of each company to be specified), that it would not trade in such shares/securities and that it has neither accepted nor would accept any public deposit during the year. 47[9A Nothing contained in paragraphs 4 to 7 shall apply to an NBFC being a Government company as defined under section 617 of the Companies Act, 1956 (1 of 1956). ] Exemptions 10. The Reserve Bank of India may, if it considers necessary for avoiding any hardship or for any other just and sufficient reason, grant extension of time to comply with or exempt any company or class of companies from all or any of the provisions of these directions either generally or for any specified period subject to such conditions as the Reserve Bank of India may impose. Saving of action taken or that may be taken for contravention of the 11. It is hereby clarified that the supersession of the Non-Banking Financial Companies (Reserve Bank) Directions, 1998 contained in Notification No.DFC.114/DG (SPT)-98 dated January 2, 1998 shall not in any way affect - and any such investigation, legal proceeding or action may be instituted, continued, or enforced and any such penalty, forfeiture or punishment may be imposed as if those directions had not been superseded. Applicability of the directions to companies 12. The provisions of these directions, as in force for the time being, shall apply to or in relation to every company which is a financial institution but does not belong to any of the categories of the companies mentioned in sub- paragraph (1) of paragraph 2 of these directions or is not a miscellaneous non-banking company within the meaning of the Miscellaneous Non-Banking Companies (Reserve Bank) Directions, 1977 or is not a residuary non-banking company within the meaning of Residuary Non-Banking Companies (Reserve Bank) Directions, 1987 as they apply to or in relation to a loan company. (S.P. TALWAR) Second Schedule RESERVE BANK OF INDIA
1. Ahmedabad Regional Office, State of Gujarat and Union 3. Bhopal Regional Office, 48 [States of Madhya Pradesh and 4. Bhubaneswar Regional Office State of Orissa. 5. 49 [Kolkata] Regional Office, States of Sikkim, and West 6. Chandigarh Regional Office, States of Himachal Pradesh, 7. Chennai Regional Office, State of Tamil Nadu and Union 9. Hyderabad Regional Office, State of Andhra Pradesh. 10. Jaipur Regional Office, State of Rajasthan. 11. Jammu Regional Office, State of Jammu and Kashmir. 51 [12.Kanpur Regional Office 29[States of Uttar Pradesh and 13. Mumbai Regional Office, States of Goa and Maharashtra 14. New Delhi Regional office, State of Haryana and 15. Patna Regional Office, 29 [States of Bihar and Jharkhand ] 16. Thiruvananthapuram State of Kerala and Union 52Form - NBS 1 Annual Return on Deposits as on 31, March 20. .
Name of the Company: ………………………………….. Instructions for filling in the Return - General 1. This Return should be submitted by a Non-Banking Financial Company covered by Para 8(3) of Notification No.DFC.118/DG(SPT)-98 dated January 31, 1998 and by a Miscellaneous Non-Banking Company covered by para 11 of the Notification No.DNBC.39 / DG (H)-77 dated June 20, 1977 to the Regional Office of Department of Non-Banking Supervision, Reserve Bank of India where its Registered Office is situated, once a year, after March 31 and latest by September 30, with reference to its position as on March 31, irrespective of the date of closing of the financial year of the Company concerned. A Certificate from the Auditors of the Company should be appended to the Return as per format furnished herewith. However, only in respect of Part-3, the information should be furnished as per the latest balance sheet but preceding the date of the return. 2. Submission of the Return should not be delayed for any reason such as the finalisation/ completion of the Audit of the annual accounts. The compilation of the Return should be on the basis of the figures available in the books of accounts of the company and should be certified by its Statutory Auditors. 3. The number of accounts should be given in actual figures while the amounts of deposits should be shown in lakhs of rupees. The amount should be rounded off to the nearest lakh. Illustratively, an amount of Rs.4,56,100 should be shown as 5 and not as 4.6 or 5,00,000. Similarly, an amount of Rs.61,49,500 is to be shown as 61 and not as 61.5 or 61,00,000. 4. The Return should be signed by a Manager (as defined in Section 2 of the Companies Act, 1956) and if there is no such Manager, by Managing Director or any official of the Company who has been duly authorised by the Board of Directors and whose Specimen Signature has been furnished to the Reserve Bank of India for the purpose. In case the Specimen Signature has not been furnished in the prescribed card, the Return must be signed by the authorised official and his Specimen Signature furnished separately. 5. In case there is nothing to report in any part / item of the Return, the relevant part/ item may be marked ‘Nil’ in the column meant for “No. of accounts” and 00s may be indicated in the column meant for “Amount”. 6. ‘Subsidiaries’ and ‘Companies in the same group’ mentioned in this Return have the same meanings assigned to them in Section 4 and Section 372 (11) respectively, of the Companies Act, 1956 as appearing prior to amendment to the Companies Act dated 31st October 1998. 7. In case this return is being filed through electronic media(internet), to the specified Web Server, a hard -copy of the same may be submitted to the concerned Regional Office duly signed . 1. Company Profile CERTIFICATE 1. Certified that the directions contained in the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998* (as amended from time to time)/ Miscellaneous Non-Banking Companies (Reserve Bank) Directions, 1977*, as the case may be, are being complied with. 2. Further certified that the particulars / information furnished in this Return have been verified and found to be correct and complete in all respects. Signature of Manager / Managing Director / Date: Auditor’s Report We have examined the books of account and other records maintained by ----------------------------------------- Company Ltd. in respect of the data furnished in this return and report that to the best of our knowledge and according to the information and explanations given to us and shown by the records examined by us, the data furnished in this return are correct. Name of the Chartered Accountants Place : 1. The following documents should be submitted along with the return in case they have not already been sent. Please tick in the box against the item for the documents enclosed and state the date of submission in other cases. (ii) Specimen signature card. 2. A list of Principal officers and the names and addresses of directors in the form enclosed is to be sent with this return. Part - 12 List of principal officers and directors of -------------------------------------------------- Ltd. I. Principal Officers
II. Directors
Signature of Manager / Managing Director/ Name : 1 Inserted vide notification No. 189 dated December 06, 2006 |
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