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Here are FAQs on Non-Banking Financial Company-
Ans.: NBFC is a Non-Banking Financial Company which the principal business of which is:
Note: NBFC is regulated by Reserve Bank of India.
Ans.: The difference between an NBFC and a Bank is:
Ans.: There are 2 types of NBFC’s, and they are:
Non-Banking Companies are further classified on the basis of their size.
Ans.: The following business cannot be registered as NBFC:
Ans.: As per the rules & regulations of Reserve Bank of India Act, 1934 “No company can commence the business of NBFC unless it has obtained the certificate of NBFC registration and having a net owned fund of Rs. 2 Crore”.
For registering as an NBFC an application to the Regional Office of RBI should be made along with the required documentation.
Ans.: Reason for the growth of NBFC:
Ans.: A time period has been provided regarding the maximum and minimum time limit for which NBFC can accept the deposit.
Minimum time period: 12 months.
Maximum time period: 60 months.
It is the discretion of deposit accepting NBFC that it can pay back the amount of deposit before its maturity period but such deposit cannot be paid back before 3 months from the date of its acceptance.
If the deposit is paid back after 3 months but before 6 months of its acceptance no interest will be paid.
But if the deposit is paid back after 6 months of its acceptance but before the maturity period then interest shall be paid but that interest shall be lower than 2% of the contracted rate.
Ans: Likewise, any other company takeover of NBFC can also take place. The rules and regulations regarding the takeover of NBFC are regulated by the Reserve Bank of India. So, the takeover of NBFC means when any other NBFC acquires the other NBFC it is considered a takeover. Similarly, it can also be done in two different ways i.e. friendly takeover and a hostile takeover.
Also, Read: What is Post Merger or Reorganization of a Company?.
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