The reserve bank of India (RBI) kick started in April 1935, its aim being to regulate the Indian currency (rupee), it is the central bank in India thus controls and regulates all financial institution including the None Banking Financial Companies (NBFC).
Policies of The reserve bank of India (RBI) on Non- banking financial companies (NBFC)
On February 18 2016 the RBI asked NBFC to provide fraud free services to its clients. According to the letter sent to the Chief General Manager, the NBFC‘s said that, fraud should be reported quarterly to the RBI, Central fraud monitoring cell and Department of banking supervision and took effect immediately.
The concern about NBFC branches not submitting the correct number of their returns was raised…show more content…
The past 3years performance of the Non -banking financial companies should be Satisfactory.
• Non – banking financial companies will not be allowed to carry out insurance departments. An NBFC company or a banking company will not be allowed to join the insurance business normally on risk participation basis.
• A registered Non -banking company with the Central Bank of India, joining the insurance business as an agent or on risk taking basis is required to attain approval from the RBI first. This is to ensure that all the NBFC taking part in the insurance business in any basis does not get contaminated by the risks.
Eligibility to enroll into the insurance business will be allowed with the reference from the past year’s balance sheet.
If the Non- Banking Financial Company meets the criteria they are advised to submit their application to their regional office of the Reserve bank of which your NBFC is registered.
NBFC was to make amendments on their Fair Practices code this is according to the March 26 2012 guidelines that include:
a. Application for loan and their processing
b. Non- banking Financial Companies to adopt the FPC guidelines and framework regulations.
c. Lending money against Gold
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