Ans.: The following business cannot be registered as NBFC:

• Any institution whose principal business is of agriculture.
• Or any business who is engaged in industrial activity.
• Or any institution which is engaged in purchase or sale of any goods (other than securities).
• Or which is providing any services.
• Or which is engaged in sale/purchase/construction of immovable property.
• Or any other company whose principal business is receiving deposits under any scheme or arrangement in one lum

Ans.: As per the rules & regulations of Finance Seva “No company can commence the business of NBFC unless it has obtained the certificate of 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:

• NBFC has the ability to understand the customer’s profile and offer the best product according to the customers need.
• They offer the competitive interest rates.
• Provide flexible repayment scheme and extended loan tenure.
• A minimum number of documents are required at the time of providing financial assistance as compared to banks.

Loan seekers have flexible eligibility criteria

Ans.: A time period has been provided regarding the maximum and minimum time limit for which NBFC can accept 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