The guidelines provide that NBFC registered with RBI, having Net Owned Fund (NoF) of rupees five crores as per the last audited balance sheet shall be permitted to undertake insurance business as an agent of insurance companies.

Other criteria: The NBFCs must comply with Section 45 IC of the RBI Act, 1934.

CC.No. 12 /02.01/99-2000 dated January 13, 2000, it was provided that NBFC must obtain prior approval of RBI before applying to the Registrar of Companies (ROC) for change of name.

These companies are under obligation to fulfill the statutory requirements imposed by the Companies Act and RBI.

Where the depositor dies, the company may repay the deposit at the request of the joint holders within the lock-in period.

Define a Non-Banking Financial Company (NBFC)?

The term debt has been defined under Section 2 of “The Recovery of Debts Due to Banks and Financial Institutions Act, 1993” as: Liability (including interest) due from any person, as claimed by a bank/ financial institution/ consortium of banks/ financial institutions during the course of any business activity undertaken by such institution, which is in cash/otherwise, secured/unsecured, or assigned or to be paid under a decree or order of a civil court or arbitration award or otherwise or under a mortgage and recoverable on, the date of the application.

The company registered under the Companies Act, 2013 whose principal business is Financial activity such as chit fund business, insurance business, loans and advances, acquisition of shares or other types of securities, leasing, etc. is a Non-Banking Financial Company (NBFC).

A Non-Banking Financial Company (NBFC) is a financial institution that works like a bank but does not have a banking license offering financial products and services to customers.

Companies need funds to fulfill their daily obligations to run their business efficiently, some of the basic funding requirements are: Fulfill everyday operational requirements and support business needs; For business expansion,  Increasing the standards of business, Coping with rising competition in the financial market, Developing better products and services to meet the customer’s needs etc.