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Domestic Deposits

IV. Advances against shares and debentures

There is no prohibition on banks’ placing of funds with non-banking non-financial companies under their Public Deposit Schemes. However, investment in the Public Deposit Scheme of such companies should be classified by banks as loans/ advances in their balance sheet and returns submitted under the Banking Regulation Act, 1949 and the Reserve Bank of India Act 1934.

External Commercial Borrowings (ECB) and Trade Credits

K. MISCELLANEOUS

No.

All you wanted to know about NBFCs

D. Definition of deposits, Eligible / Ineligible Institutions to accept deposits and Related Matters

Yes, nomination facility is available to the depositors of NBFCs. The Rules for nomination facility are provided for in Section 45QB of the RBI Act, 1934. NBFCs have been advised to adopt the Banking Companies (Nomination) Rules, 1985 made under Section 45ZA of the Banking Regulation Act, 1949. Accordingly, depositor/s of NBFCs are permitted to nominate a person to whom the NBFC can return the deposit in the event of the death of the depositor/s. NBFCs are advised to accept nominations made by the depositors in the form similar to one specified under the said rules, viz., Form DA 1 for the purpose of nomination, and Form DA2 and DA3 for cancellation of nomination and change of nomination respectively.

Foreign Investment in India

III. Investment in other securities

Answer: An Alternative Investment Fund (Category III) with foreign investment can make portfolio investment in only those securities or instruments in which an FPI is allowed to invest under the Act, rules or regulations made thereunder.IV. Reporting Delays

Indian Currency

E) Counterfeits/Forgeries

A forged note can be identified on the basis of the security features which are present in a genuine Indian currency note. These features are easily identifiable by seeing, touching and tilting the note. The information regarding security features present in the Indian banknotes is available on the website www.rbi.org.in>>Currency Management>>paisaboltahai at https://rbi.org.in/web/rbi/rbi-kehta-hai/know-your-banknotes

FAQs on Non-Banking Financial Companies

Extent of regulations over NBFCs accepting public deposits and not accepting public deposits

The NBFCs except RNBCs not accepting/holding public deposits are not required to submit to RBI their Statutory Returns in the First Schedule or the Balance Sheet or the Quarterly Liquid Asset Return or the Half-yearly Prudential Norm Return. However, all the NBFCs (other than those exempted - see answer to question No. 1) are required to be Registered with RBI and and also make sure that they continue to be eligible to remain Registered. RBI has powers to cause Inspection of the Books of any company and call for any other information about its business activities. For this purpose, the NBFCs are required to furnish the information in respect of any change in the composition of their Board of Directors, address of the company and its Directors and the name/s of its Auditors.

Retail Direct Scheme

Investment and Account holdings related queries

No. However, the securities purchased will reflect in the holdings statement in your Retail Direct account.

Domestic Deposits

IV. Advances against shares and debentures

Banks can purchase letter of allotment in respect of PSU bonds subject to the following conditions.

  1. The transactions (other than interbank transactions) should be undertaken only through recognized Stock Exchanges and registered brokers.

  2. While purchasing the bonds, the bank should ensure that it gets a clear title to the security and the security is tradable in the secondary market.

  3. The bank should prescribe its internal guidelines with the approval of the Board for undertaking such transaction.

External Commercial Borrowings (ECB) and Trade Credits

PART II: TRADE CREDITS (TC)

AD banks can issue SBLC on behalf of their customers for availing short term trade credit from overseas lenders in foreign currency subject to such SBLCs complying with the provisions contained in Department of Banking Regulation Master Circular No. DBR. No. Dir. BC.11/13.03.00/2015-16 dated July 1, 2015 on “Guarantees and Co-acceptances”, as amended from time to time.

All you wanted to know about NBFCs

D. Definition of deposits, Eligible / Ineligible Institutions to accept deposits and Related Matters

NBFCs that ought to have sought registration from the Reserve Bank but are functioning without doing so are committing a breach of law. Such companies are liable for action as envisaged under the RBI Act, 1934. To identify such entities, the Reserve Bank has multiple sources of information. These include market intelligence, complaints received from affected parties, industry sources, and exception reports submitted by statutory auditors in terms of Master Direction - Non-Banking Financial Companies Auditor’s Report (Reserve Bank) Directions, 2016 (as amended from time to time). Further, the State Level Co-ordination Committees (SLCC) is convened by the Reserve Bank in all the States/UTs on quarterly basis. The SLCC is now chaired by the Chief Secretary/ Administrator of the concerned State/UT and has, as its members, apart from the Reserve Bank, the Regional Directorate of the MCA/ ROC, local unit of SEBI, NHB, Registrar of Chits, ICAI, Economic Intelligence Unit of the State Police and officials from Law and Home Ministries of the State Government. As all the relevant financial sector regulators and enforcement agencies participate in the SLCC, it is possible to quickly share the information and agree on an effective course of action to be taken against entities indulging in unauthorized and suspect businesses involving funds mobilization from public.

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