FAQ Page 1 - RBI - Reserve Bank of India
FAQs on Non-Banking Financial Companies
Prudential Norms
All you wanted to know about NBFCs
D. Definition of deposits, Eligible / Ineligible Institutions to accept deposits and Related Matters
Domestic Deposits
IV. Advances against shares and debentures
Retail Direct Scheme
Investment and Account holdings related queries
Indian Currency
F) COINS
Twenty five (25) paise coins have been withdrawn from circulation with effect from June 30, 2011 and are, therefore, no more legal tender. Coins of denominations below 25 paise were withdrawn from circulation much earlier. All other denominations of coins of various size, theme and design minted by Government of India under The Coinage Act, 2011 and issued by RBI for circulation from time to time, continue to remain legal tender.
FAQs on Non-Banking Financial Companies
Prudential Norms
- Each category of quoted investments is to be valued scrip-wise. Category of investment means the different types of securities under each head viz. equity shares, preference shares, debentures, bonds and Government securities. Only quoted investments can be classified as long term or current investments. The long term investments are allowed to be valued as per AS-13 of the ICAI but the current investments are required to be valued at their market price. However, the NBFCs have been permitted under Prudential Norm Directions, the facility of block valuation method for accounting for the investments. The net of depreciation and the appreciation in the value of the current quoted investments, is only required to be charged to the Profit and Loss Account of the current year. The appreciation in the value of current investments in any category cannot be booked as profit. The concept of block valuation is explained below :
Example No. 1
Name of the scrip |
Market value |
Book value |
Difference (+)/(-) |
|
A |
200 |
150 |
(+) 50 |
|
B |
210 |
180 |
(+) 30 |
|
C |
180 |
240 |
(-) 60 |
|
D |
240 |
300 |
(-) 60 |
Total appreciation Rs. 80/-
Total depreciation Rs. 120/-
Net depreciation Rs. 40/- to be charged to Profit and Loss |
|
Account as per provisions for |
Example No. 2
Name of the scrip |
Market value |
Book value |
Difference (+)/(-) |
|
A |
150 |
200 |
(-) 50 |
|
B |
180 |
210 |
(-) 30 |
|
C |
240 |
180 |
(+) 60 |
|
D |
300 |
240 |
(+) 60 |
Total appreciation Rs. 120/-
Total depreciation Rs. 80/-
Net appreciation Rs. 40/- to be ignored.
This appreciation in the value of equity shares cannot be adjusted against the depreciation in the value of any other category of securities.
All you wanted to know about NBFCs
E. Depositor Protection Issues
Some of the important regulations relating to acceptance of deposits by NBFCs are as under:
-
The NBFCs are allowed to accept/renew public deposits for a minimum period of 12 months and maximum period of 60 months. They cannot accept deposits repayable on demand.
-
NBFCs cannot offer interest rates higher than the ceiling rate prescribed by RBI from time to time. The present ceiling is 12.5 per cent per annum. The interest may be paid or compounded at rests not shorter than monthly rests.
-
NBFCs cannot offer gifts/incentives or any other additional benefit to the depositors.
-
NBFCs should have minimum investment grade credit rating.
-
The deposits with NBFCs are not insured.
-
The repayment of deposits by NBFCs is not guaranteed by RBI.
-
Certain mandatory disclosures are to be made about the company in the Application Form issued by the company soliciting deposits.
Domestic Deposits
V. Donations
Retail Direct Scheme
Investment and Account holdings related queries
Indian Currency
F) COINS
RBI has not prescribed any limit for coin deposits by customers with banks. Banks are free to accept any amount of coins from their customers.
Page Last Updated on: December 10, 2022