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COMMERCIAL BANKS IN INDIA

Introduction

In the earlier societies functions of a bank were done by the corresponding institutions

dealing with loans and advances. Britishers brought into India the modern concept ofbanking by the start of Bank of England in 1694. In 1708, the bank of England was given

the monopoly for the issue of currency notes by an Act. In nineteenth century various

banks started operations, which primarily were receiving money on deposits, lendingmoney, transferring money from one place to another and bill discounting.

History of Banking in India:

Banking in India has a very old origin. It started in the Vedic period where literatureshows the giving of loans to others on interest. The interest rates ranged from two to five

percent per month. The payment of debt was made pious obligation on the heir of the

dead person.

Modern banking in India began with the rise of power of the British. To raise the

resources for the attaining the power the East India Company on 2 nd June 1806 promotedthe Bank of Calcutta. In the mean while two other banks Bank of Bombay and Bank of

Madras were started on 15th April 1840 and 1st July, 1843 respectively. In 1862 the right

to issue the notes was taken away from the presidency banks. The government also

withdrew the nominee directors from these banks. The bank of Bombay collapsed in1867 and was put under the voluntary liquidation in 1868 and was finally wound up in

1872. The bank was however able to meet the liability of public in full. A new bank

called new Bank of Bombay was started in 1867.

On 27

th

January 1921 all the three presidency banks were merged together to form theImperial Bank by passing the Imperial Bank of India Act, 1920. The bank did not havethe right to issue the notes but had the permission to manage the clearing house and hold

Government balances. In 1934, Reserve Bank of India came into being which was made

the Central Bank and had power to issue the notes and was also the banker to theGovernment. The Imperial Bank was given right to act as the agent of the Reserve Bank

of India and represent the bank where it had no braches.

In 1955 by passing the State Bank of India 1955, the Imperial Bank was taken over andassets were vested in a new bank, the State Bank of India.

Bank Nationalization:

After the independence the major historical event in banking sector was the

nationalization of 14 major banks on 19 th July 1969. The nationalization was deemed as a

major step in achieving the socialistic pattern of society. In 1980 six more banks werenationalized taking the total nationalized banks to twenty.

Various Types of banking services:

The flow chart below shows the various types of banking services:


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Land Mortgage IFCI

Rural Credit SFCsMutual Funds

Industrial Dev. IRBI

Housing Finance NABARD

EXIM Bank HDFCSIDBI

Private Sector

NBFC

Structure of schedule commercial banks:

The composition of the board of directors of a scheduled commercial bank shall consistof whole time chairman. Section 10A of the Banking Regulation Act, 1949 provides that

not less than fifty-one per cent, of the total number of members of the Board of directors

of a banking company shall consist of persons, who shall have special knowledge or

practical experience in respect of one or more of the matters including accountancy,agriculture and rural economy, banking, co-operation, economics, finance, law, small-

scale industry, or any other matter the special knowledge of, and practical experience in,

which would, in the opinion of the Reserve Bank, be useful to the banking company. Outof the aforesaid number of directors, not less than two shall be persons having special

knowledge or practical experience in respect of agriculture and rural economy, co-

operation or small-scale industry.

Besides the above the board of the scheduled bank shall consist of the directors

representing workmen and officer employees. The Reserve Bank of India and the Central

Government also has right to appoint their nominees into the board of the banks.

Commercial

Banks

Specialized

banks

Institutional

banks

Non Banking

Financial Institutions

Nationalisedbanks (20)

SBI and

Associate

Banks

Private SectorsBanks

Foreign Banks

Old private

sector banks

New private

sector banks

CENTRAL BANK


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Present scenario of the banks in India:

Banks are extremely useful and indispensable in the modern community. The bankscreate the purchasing power in the form of bank notes, cheques bills, drafts etc, transfers

funds bring borrows and lenders together, encourage the habit of saving among people.

The banks have played substantial role in the growth of Indian economy. From the

meager start in 1860 the banks have come to long way. At present in India there are 20

nationalized banks, State bank of India and its seven Associate banks, 21 old privatesector banks and 8 new private sector banks. Besides them there are more than 30 foreign

banks either operating themselves or having their branches in India. The statistical table

hereunder shows the financial position of the banks as on 31.03.2005.

Statistical table for banks in India (Year 2004-05)

(Rs. In Crores)

State bank of India and its associates

Name of bank Year ofincorporatio

n

No. ofOffices

Networth Deposits Advances Interestincome

NetNPA

ratio

State Bank of

Bikaner & Jaipur

1966 833 1298 19038 12009 1741 1.61

State Bank of

Hyderabad

1941 943 1765 28930 15600 2325 0.61

State Bank of India 1955*. 9161 24072 367048 202374 32428 2.65State Bank of

Indore

1960 456 904 13807 9041 1110 1.00

State Bank of

Mysore

1913 639 756 13585 8781 168 0.92

State Bank of

Patiala

1917 754 2045 26496 15359 2133 1.23

State Bank of

Saurashtra

1902 429 794 12613 6714 1132 1.40

State Bank of

Travancore

1945 681 1130 24133 14848 2008 1.81

* From 27th January 1921 to 30th June 1955 it was Imperial Bank of India, which cameabout by merger of Bank of Bengal (2nd June 1806), Bank of Bombay (15th April 1840)

and Bank of Madras (1st July, 1843).


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Nationalized Banks

Name of bank Year of

incorporatio

n

No. of

Offices

Networth Deposits Advances Interest

income

Net

NPA

ratio

Allahabad Bank 1865 2027 2328 40762 21151 3186 1.28Andhra Bank 1923 1159 1837 27551 17517 2273 0.28

Bank of Baroda 1908 2772 5628 81333 43400 6431 1.45

Bank of India 1906 2668 4465 78821 56013 6032 2.77

Bank ofMaharashtra

1935 1330 1543 28844 13062 2368 2.15

Canara Bank 1906 2627 6109 96908 60421 7572 1.88

Central Bank of

India

1911 3239 3265 60752 27277 5205 2.98

Corporation Bank 1906 799 3054 27233 18546 2250 1.12

Dena Bank 1938 1072 1104 20096 11309 1725 5.23

Indian Bank 1907 1417 5936 34809 18360 2871 1.35Indian Overseas

Bank

1937 1583 2575 44241 25205 3951 1.27

Oriental Bank of

Commerce

1943 1166 3327 47850 25299 3572 1.29

Punjab & Sind

Bank

1908 787 440 14171 6322 1249 8.11

Punjab NationalBank

1895 4117 8161 103167 60413 8460 0.20

Syndicate Bank 1925 1905 2199 46295 26729 3758 1.59

UCO Bank 1943 1801 2049 49470 27656 3547 2.93

Union Bank ofIndia

1919 2140 3614 61831 40105 4970 2.64

United Bank of

India

1950 1343 1957 25348 11390 2133 2.43

Vijaya Bank 1931 966 1590 25618 14336 2094 0.59

Old private Sector Banks

Name of bank Year ofincorporatio

n

No. ofOffice

s

Networth

Deposits

Advances

Interest

incom

e

NetNPA

ratio

Bank of Rajasthan 1943 388 351 8120 2896 522 2.50

Bharat Overseas Bank 1973 91 199 2749 1651 219 1.56

Catholic Syrian Bank 1920 314 210 4021 2289 368 3.80

City Union Bank 1904 137 241 3095 2013 291 3.37

Development CreditBank

1995** 88 200 3895 2001 303 6.83


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Dhanalakshmi Bank 1927 180 114 2339 1410 192 3.92

Federal Bank 1931 471 724 15193 8823 1191 2.21

Ganesh Bank ofKurundwad

-- 31 11 217 95 18 8.32

ING Vysya Bank 1930 381 710 12569 9081 991 2.13

Jammu & Kashmir Bank 1938 439 1665 21645 11517 1549 1.41Karnataka Bank 1924 398 978 10837 6287 840 2.29

Karur Vysya Bank 1926 249 761 6672 4620 591 1.66

Lakshmi Vilas Bank 1926 239 230 3496 2318 298 4.98

Lord Krishna Bank 1940 118 181 2176 1387 195 4.22

Nainital Bank 1922 69 76 933 363 74 0.00

Ratnakar Bank 1943 75 45 784 424 66 5.54

Sangli Bank 1948 192 85 1985 812 137 4.30

SBI Comm. & Intl. Bank 1993 3 88 331 231 26 7.65

South Indian Bank 1929 438 456 8492 5365 709 3.81

Tamilnad Mercantile

Bank

1921 183 559 4827 2626 513 2.95

United Western Bank 1936 237 244 6453 3976 487 5.97

** Converted to a private sector commercial bank on 31st May, 1995. Started as a Credit

Society set up by the followers of His Highness the Aga Khan in the 1930s and later

converted into Co-operative Bank.

New Private Sector banks

Name of bank Year of

incorporatio

n

No. of

Offices


income

Net

NPA

ratioBank of Punjab* 1995 120 241 4307 2417 329 4.64

Centurion Bank 1994 77 590 3530 2194 346 2.51

HDFC Bank 1994 446 4520 36354 25566 3093 0.24

ICICI Bank 1994 519 12900 99819 91405 9410 1.65

IDBI Bank Ltd. 1994 157 5929 15103 45414 2656 1.74

IndusInd Bank 1995 127 830 13114 9000 1134 2.71

Kotak Mahindra

Bank

1985 54 757 4300 4017 420 1.56

UTI Bank 1994 249 2422 31712 15603 1924 1.39

Yes Bank 2003 3 217 663 761 30 0.00

* now merged with Centurion Bank


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Foreign Banks

Name of bank No. of

Offices


income

Net NPA

ratio

ABM Amro Bank 19 1347 7077 9831 907 0.35

Abu DhabiCommercial Bank

2 71 1663 90 150 12.73

American ExpressBank

8 301 2264 1483 270 0.99

Antwerp DiamondBank

1 128 50 434 26 0.00

Arab Bangladesh

Bank

1 45 23 22 3 0.28

Bank International

Indonesia

1 74 11 20 1.81 10.49

Bank of America 5 1437 1993 3219 257 0.00

Bank of Bahrain &

Kuwait

2 67 394 264 34 5.53

Bank of Ceylon 1 54 104 59 8 13.76

Bank of NovaScotia

5 257 1602 2053 159 3.08

Bank of Tokyo

Mitsubishi

3 369 532 559 57 0.01

Barclays Bank 1 698 75 2 31 0.00BNP Paribas 9 333 1674 1719 176 0.00

Calyon Bank 4 328 1306 674 117 0.30

Chinatrust

Commercial Bank

1 45 48 59 9 6.02

Cho Hung Bank 1 72 97 69 0.99 0.00

Citibank 35 3310 21484 18111 2203 1.00

DBS Bank 1 556 611 560 30 0.00

Deutsche Bank 5 1232 3625 2541 390 0.00

Hongkong &Shanghai Banking

Corpn.

39 3578 17013 12621 1627 0.50

JP Morgan Chase

Bank

1 266 930 150 40 0.00

Krung Thai Bank 1 40 34 16 4 0.00

Mashreq Bank 2 58 269 19 29 0.00

Mizuho Corporate

Bank

1 164 110 267 17 0.00


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Oman International

Bank

2 161 225 13 18 55.05

Societe Generale 2 321 527 159 37 0.00

Sonali Bank 1 6 22 6 1 1.90

Standard Chartered

Bank

85 3234 22522 19970 2493 1.12

State Bank of

Mauritius

3 126 148 222 36 4.08

UFJ Bank 1 228 71 102 16 0.00

(Source: A profile on banks 2004-05, RBI))

The banks in India are operating through 55530 branches. All the banks together had the

net worth of Rs. 149385 crores as on 31st March, 2005. The banks also had the depositbase of Rs. 1836985 crores and the advances of Rs. 1151113 crores taking the total

business to Rs. 2988098 crores. During the year 2004-05 the banks had earned the

interest income of Rs. 154761 crores. The average net NPA ratio of the banks was alsoless 3.84% in year 2005.

Future is bright:

The Information Technology (IT) is becoming an important component of the banking

sector. The customers have become more demanding and they need value added servicesfrom the banks. The foreign banks have raised the expectations of the customers causing

the bank to invest strongly on IT. The Indian banks have started to meet the expectations

of the people by opening both onsite and offsite ATMs. Banks have also startedtelebanking, anytime/anywhere banking, mobile banking and Internet banking to give the

facilities to the customers. Banks have also following the RBI sponsored technology

programmes like mail messaging, Electronic fund transfers (EFT), Structured Financial

Messaging System (SFMS), (Real Time Gross Settlement (RTGS), Centralized FundManagement System (CFMS) and Negotiated Dealing System / Public Debt Office

(NDS/PDO).

Banks have been given more teeth to tackle the Non performing assets by passing the

Securitisation and Reconstruction of Financial Assets and Enforcement of SecurityInterest Act, 2002. Under this Act, the banks can take over the assets of the defaulters

either by themselves or with the help of Court. The power is in addition to the power to

recover through the Debt Recovery Tribunal. The Asset Reconstruction Companies havebeen formed which also take over the distress assets from the banks.

Conclusive Remarks

Banking Sector in India is likely to undergo a major change. This change will be in the

form of mergers and acquisitions and takeovers. The State Bank of India may merge allits associate banks with itself to make a one bank. The banks based in South India may

look for a bank in North India to have presence in North. Similarly banks in North may


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look for banks in South to increase its area of operations. Consolidation will be the key to

the banking sector in future.


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NON-BANKING FINANCIAL COMPANIES

NEED FOR REGISTRATION

Section 45-IA of the Reserve Bank of India Act, 1934 provides that No

non-banking financial company shall commence or carry on business of

a non-banking financial institution without

( a) obt ai ni ng a cer ti fi ca te o f r eg is tr at ion i s sued under Chap te r

IIIB; and

(b) having the net owned fund of twenty- f ive lakh rupees or such

other amount, not exceeding two hundred lakh rupees, as the

Bank may, by notification in the Official Gazette, specify.

Reserve Bank of India vide its PRESS RELEASE dated 8 th April 1999

has announced that in order to ident i fy a part icular company as a

non-baking financial company (NBFC), it will consider both, the assets

and the income pat tern as evidenced from the last audi ted balance

sheet of the company to decide i ts principal business . The company

wil l be treated as an NBFC if i ts f inancial assets are more than 50 per

cent of i t s total assets (net ted of f by intangible assets) and income

from f inancial assets should be more than 50 per cent of the gross

income. Both these tests are required to be satisf ied as the determinant

factor for principal business of a company.

Reserve Bank of India vide i t s Notification No. DNBS 132 / CGM

(VSNM) 99, dated 20/04/1999 has increased the requirement of net

owned fund f rom Rs .25 l akh to Rs .200 Lakh for the NBFC which

commences business of a non-banking financial inst i tut ion on or after

April 21, 1999.

Meaning of Business of a non-banking financial institution

Section 45-I(a) of the Reserve Bank of India Act, 1934

business of a non-banking financial inst i tut ion means carrying on of

the business of a f inancial ins t i tut ion refer red to in clause (c) and


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includes business of a non-banking f inancial company refer red to in

clause (f);

Meaning of Financial Institution

Section 45-I(c) of the Reserve Bank of India Act, 1934

financial institution means any non-banking institution which carries

on as its business or part of its business any of the following activities,

namely:-

( i) the f inancing, whether by way of making loans or advances or

otherwise, of any activity other than its own;

(ii) the a cquisition o f s hares, s tock, b onds, d ebentures o r

secur i t ies i ssued by a Government or local author i ty or other

marketable securities of a like nature;

(iii) letting o r delivering o f any g oods to a hirer u nder a

hire- purchase agreement as defined in clause (c) of section 2 of

the Hire Purchase Act, 1972 (26 of 1972);

( iv ) t he c ar ryi ng o n o f a ny c la ss o f in su ra nc e b us in ess ;

(v)managing, conducting or supervising, as foreman, agent or in

any other capacity, of chits or kuries as defined in any law which

is for the time being in force in any State, or any business, which

is similar thereto;

(vi) collecting, for a ny purpose or u nder any scheme or

ar rangement by whatever name cal led, monies in lump sum or

otherwise, by way of subscriptions or by sale of units , or other

instruments or in any other manner and awarding prizes or gif ts ,

whether in cash or kind, or disbursing monies in any other way,

to persons f rom whom monies are coll ec ted or to any o ther

person,

but does not inc lude any ins ti tu t ion , which carr ies on as i ts

principal business

(a) a gricu ltu ra l op eration s; o r

( aa ) i ndus tr ia l act iv it y; o r

(b) the purchase or sa le of any goods (other than secur it ies)

or the providing of any services; or


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(c) the purchase, construction or sale of immovable

property, so, however, that no port ion of the income of

t he i ns ti tu tio n is d er iv ed f ro m th e f in an ci ng o f

p ur ch as es , c on st ru cti on s o r s ale s o f i mm ov ab le

property by other pe rsons;

Explanation- For the purposes of this clause, "industr ial activity"

means any activity specif ied in sub-clauses ( i) to (xvii i) of clause

(c) of sect ion 2 of the Indust r ial Development Bank of India Act ,

1964 (18 of 1964).

Meaning of NBFC

Section 45-I(f) of Reserve Bank of India Act, 1934

non-banking financial company means

( i) a f inancial inst i tution which is a company;

(ii) a non-banking institution which is a company and

which has as i t s pr incipal business the receiving of deposi ts ,

under any scheme or a r rangement or in any o ther manner , or

leading in any manner;

(iii) such other non-banking institution or class of such

insti tut ions, as the Bank may, with the previous approval of the

Central Government and by notif ication in the Official Gazette,

specify.

EFFECT OF NON-REGISTRATION

Sub-sect ion (4A) of Sect ion 58B of the Reserve Bank of India Act ,

1934 provides

If any person contravenes the provisions of sub-section (1) of section

45-IA, he shall be punishable with imprisonment for a term which shall

not be less than one year but which may extend to f ive years and with

fine which shall not be less than one lakh rupees but which may extend

to five lakh rupees.


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Section 58C provides as follows

(1)Where a person committ ing a contravention or default referred to

in section 58B is a company, every person who at the time the

contravention or default was committed, was incharge of, and

was r es pons ib le t o, t he company f or t he conduct o f t he

business of the company, as wel l as the company, shal l be

deemed to be guil ty of the contravention or default and shall

be liable to be proceeded against and punished accordingly:

Provided tha t noth ing contained in thi s sub-sec tion shal l

render any such person l iable to punishment if he proves that

t he con tr aven ti on o r def au lt was commi tt ed wit hout h is

knowl edge o r t ha t he had exe rc is ed a ll due d il igence t o

prevent the contravention or default.

(2) Notwiths tanding anything contained in sub-sec tion (1), where

an offence under this Act has been committed by a company

and it is proved that the same was committed with the consent

or connivance of, or is at tr ibutable to any neglect on the part

of, any d irec tor , manager , secre tary, or o ther of fi cer or

employee of the company, such director , manager, secretary,

other officer or employee shall also be deemed to be guil ty of

the offence and shal l be l iable to be proceeded agains t andpunished acco rdingly."


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COMPLIANCES FOR NBFC

Under Particular Frequency Applicability

Under Reserve Bank of India Act, 1934

Section

45-IA

NBFC have to make

appl ica tion for r egis tr at ion

with RBI and shall not

commence or carry on

bus ines s o f a non-banki ng

f inancial ins ti tut ion wi thoutobta in ing regi st ra tion f rom

RBI and maintaining NOF.

NOF requirement for NBFC

registered

Before 21/04/1999 =

Rs.25 lacs

On or af ter 21/04/1999 =

Rs.200 lacs

One time All NBFC

Section45-IB

Maintenance of percentageof assets

Invest and continue to invest

5% to 25% (specified by RBI)

of deposits outstanding on the

last working day of the

second preceding quar ter in

unencumbered approved

securities.

Notification No.

D FC .1 21 /E D( G) -9 8 d ate d

31.01.1998 and No.

DFC(COC) NO.108-ED(JRP)-

97 dated 30.04.1997

Ongoing NBFC accepting/ holding Public

Deposit

Section Reserve Fund Yearly All NBFC


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45-IC Every NBF C s ha ll c reat e a

rese rve fun d an d tra nsfe r

t he re in a s um not l es s t han

20% of i ts net p ro fi t eve ry

year as disclosed in the profi tand loss account and before

any dividend is declared.

Section

45-M

Du ty o f NB FC t o f urn is h

statements etc., required by

Bank

When asked

for

All NBFC

Under Non-Banking Financial Companies Acceptance of Public

Deposit (Reserve Bank) Directions, 1998

Notification No.DFC.118/DG(SPT)-98 dated 31.01.1998

Para 4 Minimum Credit Rating,

Prohibi t ion on acceptance of

Deposit, repayable on

demand, P er iod o f Depos it

(12 to 60 Months only),

Ceiling on quantum of

deposi ts (depends on s tatus ,

rat ing, etc.) , Status in case ofDowngrading of credit rat ing,

Re gu larisatio n o f Pu blic

D ep os it a cc ep te d e ar li er ,

Ceil ing on the rate of interest

(max 11%), Payment of

Brokerage, etc.

ongoing

All NBFC

Not appl icable

subject to

1) not

accepting

Public

Deposit

2) passed a

resolution

u nd er p ar a

9

Para

4A, 4B

Branches, agents, closures of

branches

Para 5 Information to be included in

the Boards report

e .g . to ta l no . of accounts of

public deposi t, total amount

due or unpaid, etc.


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Para 6 S af e c us to dy o f a pp ro ve d

securities

Para 7 Employee Security Deposit

Para 8 Copies of ba lance sheet and

account s t oget he r w it h t heDirec tor s r eport , audi tors

r ep or t, n ote s o n a cc ou nt s,

returns in Form NBS 1 and

int imation of any change in

address , di rectors , pr incipal

officers, specimen signatures

etc should be furnished to the

Reserve Bank within 30 days

of the occurrence of event.Para 9 Non-applicability of

Direct ion to cer tain types of

NBFC

a) Insurance company

b) Loan company, an

in ve st me nt c om pa ny , a

hi re purchase company or

equipment leasing

company not hol di ng o r

accept ing public deposi ts

and pas s a r es ol ut ion t o

the ef fect within 30 days

of the commencement of

the financial year

c) An in ve stme nt c omp an y

( inves ting only in group

compani es not l es s t han

90% of its assets) and pass

a r esolu tion that has not

a cc ep te d a nd w ou ld n ot

accept Public Deposit and

would not t rade i n s uch

shares / securi ti es within

Every year

within 30 days

from the

commencement

of financial

year

All NBFC,

which wants to

claim

exemptions


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30 days of the

commencement of the

financial year.

Under Non-Banking Financial Companies Prudential Norms (ReserveBank) Directions, 1998

Notification No.DFC.119/DG(SPT)-98 dated 31.01.1998

Para 3,

4, 5, 6

Income recognition

I ncome f rom NPA s ha ll be

recognized only when

actually realised. All

unr ea li sed i ncome on NPA

shall be reversed.

Ongoing All NBFC

Income from investment

Div idend i ncome on s ha res

and uni ts o f Mut ua l F unds

shall be taken on cash basis.

Income from Bonds and

Debentures from Govt.

S ecur it ie s may be t aken on

accrual basis.

Income from securities(guaranteed by Central Govt.

or State Govt . ) may be taken

on accrual basis.

Accounting Standards

Accounting standards shall be

followed

Accounting of investment

Board of Directors shall

frame investment policy

Other requirement regarding

accounting of investment

Para

6A

Need for Policy on Demand /

Call Loans

Policy for demand / call loan

Ongoing All NBFC

giving loan etc.


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shall be framed

Para 7,

8, 9

Asset classification

Assets shall be class i fied as

Standard, Sub-standard,

Doubtful and Loss assets.

Ongoing All NBFC

Provisioning requirements

Prov isio n fo r a ssets (i.e .

loans, advances or other

c redi t f ac il it ie s i nc ludi ng

bills purchased & discounted,

Leased and h ir e pur chas ed

assets) shall be made

Ongoing

Disclosure in the Balance

SheetProvision as in para 8 should

be disclosed wi thout net ting

off

Yearly

Para

9A

Constitution of Audit

Committee

C om pa ny h av in g a ss ets o f

Rs.50 crore and above shall

constitute an Audit

Committee.

Ongoing NBFC having

assets of Rs.50

crore and above

Para

9B,

9BB

Accounting Year

Every NBFC shall prepare i ts

B/S and P/L as on 31 s t March

Yearly All NBFC

S ch ed ul e to t he Ba lan ce

Sheet

Every NBFC shall append to

its B/S particulars in the

format as set in schedule

Para

9C

Transaction in Government

Securities

NBFC shall hold investment

in approved securities in a

dematerialised form only.

Ongoing All NBFC

Para Requirement as to Capital Ongoing NBFC accepting


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10 adequacy

NBFC shall maintain

minimum capital ratio

/ holding Public

Deposit

Para

11

Loan aga inst NBFCs own

shares prohibitedNo loan again st own shares

shall be given

Ongoing All NBFC

Para

11A

NBFC failing to repay

public depos it prohibi ted

from making loans and

investments

As long as

default exists

NBFC ac cepting

/ holding public

deposit

Para

11B

Restrict ions on investment

in l an d a nd b ui ld in g a ndunquoted shares

Restriction has been specified

(10% of NOF)

Ongoing NBFC accepting

/ holding publicdeposit

Para

12

C on ce nt ra tion o f c re di t /

investment

Restriction has been specified

(Lend or invest to single

person 15% and group 25%)

(Both lend and invest 25%

and 40% respectively)

Ongoing NBFC accepting

/ holding Public

Deposits

Para

13

Submiss ion o f hal f-year ly

return

Half yearly return in Form

NBS-2 to be submitted

Half Yealy NBFC accepting

/ holding Public

Deposit and

RNBFC

Para

13A

Infor ma tion in r eg ar d t o

change of address,

directors, auditors,

Principal officer, etc. to be

sub mi tt ed b y N BF C s n ot

a cc ep ting /h olding p ub li c

deposit

Within 30 days from the date

of occurrence of any change

Whenever

change occur

All NBFC


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Para

13B

Exposure to Capital Market

Quarterly return in Form

NBS-6

Quarterly NBFC holding

public d eposit

of Rs.50 crore

or more and

RNBFC havingliabilities of

Rs.50 crores or

more

Para

13C

Norms relating to

Infrastructure Loan

Restructuring of

Infrastructure Loan.

All NBFC

giving

Infrastructure

Loan

Under various Notification / Press release issued by Reserve Bank

Circular No. DNBS (DD)

CC.No. 15/02.01/2000-01

dated 27/06/2001

Asset Liability

Management (ALM) System

Ongoing All NBFC

having assets

more than

Rs.100 crores

Notification No. RBI/2005-

06/157 dated 6 t h September

2005Monthly return on important

financial parameters on

NBFC not accepting / holding

public deposits and having

assets size of Rs.100 crores

and above

Monthly All NBFC

having assets

more thanRs.100 crores

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