RBI/DNBR/2016-17/38
Master Direction DNBR.PD.002/03.10.119/2016-17
August
25, 2016
Master
Direction - Non-Banking Financial Companies Acceptance of Public
Deposits (Reserve Bank) Directions, 2016.
The Reserve Bank of India (the
Bank), having considered it necessary in the public interest and being
satisfied that for the purpose of enabling the Bank to regulate the credit
system to the advantage of the country, it is necessary to give the
directions set out below, hereby, in exercise of the powers conferred by
sections 45J, 45JA, 45K, 45L and 45MA of the Reserve Bank of India Act,
1934 (Act 2 of 1934) (the RBI Act) and of all the powers enabling it in
this behalf, and in supersession of the earlier directions contained in Notification
No.DFC.118/DG (SPT)-98 dated January 31, 1998 issues the following
Non-Banking Financial Companies Acceptance of Public Deposits (Reserve
Bank) Directions, 2016 (the Directions) applicable to every non-banking
financial company hereinafter specified.
Index
|
Subject
|
Chapter I –
Preliminary
|
Chapter II –
Definition
|
Chapter III –
Requirement of Maintenance of Liquid Assets
|
Chapter IV –
Restriction on acceptance of public deposit by Non-Banking Finance
Companies
|
Chapter V – General
provisions regarding repayment of public deposit
|
Chapter VI –
Miscellaneous Instructions
|
Chapter VII -
Reporting Requirements
|
Chapter VIII –
Interpretations
|
Chapter IX – Repeal
|
Annex
|
Annex I - Draft
Trust Deed
|
Annex II - Liquid
Assets (Non-Banking Finance Companies) Trustees Guidelines
|
Chapter
- I
Preliminary
1. Short Title and Commencement
of the Directions.
a.
These
directions shall be known as the “Non-Banking Financial Companies
Acceptance of Public Deposits (Reserve Bank) Directions, 2016”.
b.
These
directions shall come into force with immediate effect.
2. Applicability
(1) (i) The provisions of these
Directions shall apply to every Non-Banking Financial Company registered
with the Bank under section 45IA (5) of the RBI Act.
(ii) The provisions contained in
these directions shall not apply to a Mutual Benefit Financial Company or a
Mutual Benefit Company;
Provided that the application of
Mutual Benefit Company is not rejected by Government of India under the
provisions of the Companies Act, 1956 (Act 1 of 1956).
(ii) Nothing contained in these
directions shall be applicable to:-
an insurance company holding a
valid certificate of registration issued under section 3 of the Insurance
Act, 1938 (Act 4 of 1938), or a stock exchange notified under section 4 of
the Securities Contracts (Regulation) Act, 1956 (Act 42 of 1956), or a
stock broking company defined in section 12 of the Securities and Exchange
Board of India Act, 1992 (Act 15 of 1992);
(iv) a loan company, investment
company and asset finance company not accepting/holding any public deposit:
Provided that the company passes
in the meeting of its board of directors within thirty days of the issue of
these directions and thereafter within thirty days of the commencement of
the next financial year and each subsequent financial year, a resolution to
the effect that the company has neither accepted public deposit nor would
accept any public deposit during the year.
(v) an investment company, -
(i) which has acquired
shares/securities of its own group/holding/ subsidiary companies only and
such acquisition is not less than ninety per cent of its total assets at
any point of time;
(ii) which does not trade in
such shares/securities; and
(iii) which does not accept/hold
any public deposit:
Provided that the company passes
in the meeting of its board of directors within thirty days of the issue of
these directions and thereafter within thirty days of the commencement of
each subsequent financial year a resolution to the effect that the company
has invested or would invest/hold its investments in the shares/securities
of its group/holding/subsidiary companies of not less than 90 per cent of
its assets and (name of each company to be specified), that it would not
trade in such shares/securities and that it has neither accepted nor would
accept any public deposit during the year.
(vi) Nothing contained in these
Directions except paragraph 36,37 and 41 of the Directions shall apply to
an NBFC being a Government Company as defined in section 2(45) of the
Companies Act, 2013.
(2) Further, the Bank may, if it
considers necessary for avoiding any hardship or for any other just and
sufficient reason, grant extension of time to comply with or exempt any
company or class of companies from all or any of the provisions of these
directions either generally or for any specified period subject to such
conditions as the Bank may impose.
(3) These Directions
consolidates the regulations as issued by Department of Non-Banking
Regulation, Reserve Bank of India. However, any other Directions/guidelines
issued by any other Department of the Bank, as applicable to a Deposit
taking NBFC shall be adhered to by it.
Chapter
II
Definitions
3. For the purpose of these Directions, unless the
context otherwise requires:
(i) "Act" means the Reserve
Bank of India Act, 1934;
(ii) “Asset Finance Company”
means any company which is a financial institution carrying on as its
principal business the financing of physical assets supporting productive /
economic activity, such as automobiles, tractors, lathe machines, generator
sets, earth moving and material handling equipments, moving on own power
and general purpose industrial machines. The principal business for this
purpose is defined as aggregate of financing real/physical assets
supporting economic activity and income arising therefrom is not less than
60% of its total assets and total income respectively.
(iii) "Bank" means the
Reserve Bank of India constituted under section 3 of the Reserve Bank of
India Act, 1934;
(iv) "depositor" means
any person who has made a deposit with a company; or a heir, legal
representative, administrator or assignee of the depositor;
(v) "free reserves"
means the aggregate of the balance in the share premium account, capital
and debenture redemption reserves and any other reserve shown or published
in the balance sheet of a company and created through an allocation of
profits not being a reserve created for repayment of any future liability
or for depreciation in assets or for bad debts or a reserve created by
revaluation of the assets of the company;
(vi) “hybrid debt” means capital
instrument which possesses certain characteristics of equity as well as of
debt;
(vii) "insurance
company" means any company registered under section 3 of the Insurance
Act, 1938 (Act 4 of 1938);
(viii) "investment
company" means any company which is a financial institution carrying
on as its principal business the acquisition of securities;
(ix) “lending public financial
institution” means–
a.
a
public financial institution specified in or under section 4A of the
Companies Act, 1956 (Act 1 of 1956); or
b.
a
State Financial, Industrial or Investment Corporation; or
c.
a
scheduled commercial bank; or
d.
the
General Insurance Corporation of India established in pursuance of the
provisions of section 9 of the General Insurance Business (Nationalisation)
Act, 1972 (Act 57 of 1972); or
e.
any
other Institution which the Bank may, by notification, specify in this
behalf.
(x) "loan company"
means any company which is a financial institution carrying on as its
principal business the providing of finance whether by making loans or
advances or otherwise for any activity other than its own but does not
include an Asset Finance Company.
(xi) "mutual benefit
financial company" means any company which is a financial institution
notified by the Central Government under section 620A of the Companies Act,
1956 (Act 1 of 1956);
(xii) “mutual benefit company”
means a company not notified under section 620A of the Companies Act, 1956
(Act 1 of 1956) and carrying on the business of a non-banking financial
institution, -
a.
on 9th
January 1997; and
b.
having
the aggregate of net owned funds and preferential share capital of not less
than ten lakhs of rupees; and
c.
has
applied for issue of certificate of registration to the Bank on or before
9th July 1997; and
d.
is
complying with the requirements contained in the relevant provisions of the
Directions issued under section 637A of the Companies Act, 1956 applicable
to Nidhi Companies by the Central Government;
(xiii) “net owned fund” means
net owned fund as defined under section 45-IA of the RBI Act including the
paid up preference shares which are compulsorily convertible into equity;
(xiv) “non-banking financial
company” means only the non-banking institution which is a loan company or
an investment company or an asset finance company or a mutual benefit
financial company or a factor registered with the Bank under section 3 of
Factoring Regulation Act (2011);
(xv) “public deposit” means a
deposit as defined under section 45-I(bb) of the Reserve Bank of India Act,
1934 (2 of 1934), excluding the following:
(a) any amount received from the
Central Government or a State Government or any amount received from any
other source and whose repayment is guaranteed by the Central Government or
a State Government or any amount received from a local authority or a
foreign Government or any other foreign citizen, authority or person;
(b) any amount received from the
Industrial Development Bank of India established under the Industrial
Development Bank of India Act, 1964 (Act 18 of 1964), or the Life Insurance
Corporation of India established under the Life Insurance Corporation Act,
1956 (Act 31 of 1956), or the General Insurance Corporation of India and
its subsidiaries established in pursuance of the provisions of section 9 of
the General Insurance Business (Nationalisation) Act, 1972 (Act 57 of
1972), or the Small Industries Development Bank of India established under
the Small Industries Development Bank of India Act, 1989 (Act 39 of 1989),
or the Unit Trust of India established under the Unit Trust of India Act,
1963 (Act 52 of 1963), or National Bank for Agriculture and Rural
Development established under the National Bank for Agriculture and Rural
Development Act, 1982, or an Electricity Board constituted under the
Electricity (Supply) Act, 1948, or the Tamil Nadu Industrial Investment
Corporation Ltd., or the National Industrial Development Corporation of
India Ltd., or the Rehabilitation Industries Corporation of India Ltd., or
the Industrial Credit & Investment Corporation of India Ltd., or the
Industrial Finance Corporation of India Ltd., or the Industrial Investment
Bank of India Ltd., or the State Trading Corporation of India Ltd., or the
Rural Electrification Corporation Ltd., or the Minerals and Metals Trading
Corporation of India Ltd., or the Agricultural Finance Corporation Ltd., or
the State Industrial and Investment Corporation of Maharashtra Ltd., or the
Gujarat Industrial Investment Corporation Ltd., or Asian Development Bank
or International Finance Corporation or a company incorporated under the
Companies Act, 1956 (Act 1 of 1956); or a Corporation established by or
under any Statute; or a cooperative society registered under the
Cooperative Societies Act of any State and any other institution that may
be specified by the Bank in this behalf;
(c) any amount received by a
company from any other company;
(d) any amount received and held
pursuant to an offer made in accordance with the provisions of the
Companies Act, 2013, towards subscription to any securities, including
share application money or advance towards allotment of securities pending
allotment, to such extent and for such period as permissible under the
Companies (Acceptance of Deposit) Rules, 2014 and as amended from time to
time;
(e) any amount received from a
person who at the time of receipt of the amount was a director of the
company or any amount received from its shareholders by a private company
or by a private company which has become a public company under section 43A
of the Companies Act, 1956 and continues to include in its Articles of
Association provisions relating to the matters specified in clause (iii) of
sub-section (1) of section 3 of the Companies Act, 1956 (Act 1 of 1956):
Provided that the director or
shareholder, as the case may be, from whom the money is received furnishes
to the company at the time of giving the money, a declaration in writing to
the effect that the amount is not being given out of funds acquired by him
by borrowing or accepting from others;
provided further, that in the
case of joint shareholders of a private company, monies received from or in
the name of the joint shareholders except the first named shareholder shall
not be eligible to be treated as the receipt of money from the shareholder
of the company;
(f) any amount raised by the
issue of bonds or debentures secured by the mortgage of any immovable
property of the company; or by any other asset or which would be
compulsorily convertible into equity in the company provided that in the
case of such bonds or debentures secured by the mortgage of any immovable
property or secured by other assets, the amount of such bonds or debentures
shall not exceed the market value of such immovable property/other assets;
(fa) any amount raised by
issuance of non-convertible debentures with a maturity more than one year
and having the minimum subscription per investor at Rs.1 crore and above,
provided that such debentures have been issued in accordance with the
guidelines issued by the Bank as in force from time to time in respect of
such non-convertible debentures.
(g) any amount brought in by the
promoters by way of unsecured loan in pursuance of stipulations of lending
institutions subject to the fulfilment of the following conditions,
namely:-
i.
the
loan is brought in pursuance of the stipulation imposed by the lending
public financial institution in fulfilment of the obligation of the
promoters to contribute such finance,
ii.
the
loan is provided by the promoters themselves and/or by their relatives, and
not from their friends and business associates, and
iii.
the
exemption under this sub-clause shall be available only till the loan of
financial institution is repaid and not thereafter;
(h) any amount received from a
Mutual Fund which is governed by the Securities and Exchange Board of India
(Mutual Funds) Regulations, 1996;
(i) any amount received as
hybrid debt or subordinated debt the minimum maturity period of which is
not less than sixty months provided there is no option for recall by the
issuer within the period;
(j) any amount received from a
relative of a director of the NBFC.
Note: The deposit shall be
accepted only on an application made by the depositor containing therein
that as on the date of deposit, he is related to the specific director in
the capacity of a relative as defined under Companies Act, 1956 (1 of
1956);
(k) any amount received by
issuance of commercial paper, in accordance with the guidelines issued by
the Bank, vide Circular No.
IECD.3/08.15.01/2000-2001 dated October 10, 2000;
(l) any amount received by a
Systemically important non-deposit taking non-banking financial company by
issuance of 'perpetual debt instruments' in accordance with guidelines
issued in this regard by the Bank and as amended from time to time;
(m) any amount raised by the
issue of infrastructure bonds by an Infrastructure Finance Company, as
specified in the notification issued from time to time by the Central
Government under section 80CCF of the Income Tax Act, 1961.
(xvi) "securities"
means securities as defined in section 2(h) of the Securities Contracts
(Regulation) Act, 1956 (Act 42 of 1956);
(xvii) "subordinated
debt" means an instrument, which is fully paid up, is unsecured and is
subordinated to the claims of other creditors and is free from restrictive
clauses and is not redeemable at the instance of the holder or without the
consent of the supervisory authority of the non-banking financial company.
The book value of such instrument shall be subjected to discounting as
provided hereunder:
Remaining Maturity of the instruments
|
Rate of discount
|
(a) Upto one year
|
100 per cent
|
(b) More than one year but
upto two years
|
80 per cent
|
(c) More than two years but
upto three years
|
60 per cent
|
(d) More than three years but
upto four years
|
40 per cent
|
(e) More than four years but
upto five years
|
20 per cent
|
to the extent such discounted
value does not exceed fifty per cent of Tier I capital;
(xviii) “stock broking company”
means a company doing the business of a stock-broker or sub-broker holding
a valid certificate of registration obtained under section 12 of the
Securities and Exchange Board of India Act, 1992 (Act 15 of 1992); and
(xix) “stock exchange” means a
company recognised as a stock exchange under section 4 of the Securities
Contracts (Regulation) Act, 1956 (Act 42 of 1956).
4. Words or expressions used in these Directions but
not defined herein and defined in the RBI Act shall have the same meaning
as assigned to them in the RBI Act. Any other words or expressions used in
these Directions and not defined in these directions or in the RBI Actor
any of the Directions issued by the Bank, shall have the meanings
respectively assigned to them under the Companies Act, 1956 or Companies
Act, 2013 (Act 18 of 2013) as the case may be.
5.(i) If any question arises as to whether a company is a
financial institution or not, such question shall be decided by the Bank in
consultation with the Central Government and the decision of the Bank shall
be final and binding on all the parties concerned.
(ii) If any question arises as
to whether a company which is a financial institution is a loan company or
an investment company or an asset finance company such question shall be
decided by the Bank, having regard to the principal business of the company
and other relevant factors and the decision of the Bank shall be final and
binding on all the parties concerned.
Chapter
III
Requirement of Maintenance of Liquid Assets
6. Every NBFC-D, shall invest and continue to invest
in India in unencumbered approved securities valued at the price not
exceeding the current market price of such securities an amount which
shall, at the close of business or any day, not be less than 15% of the
“public deposit”, as defined under sub-paragraph (xv) of paragraph 3 of
these directions, outstanding at the close of business on the last working
day of second preceding quarter; and
7. All other provisions of section 45-IB of the RBI Act
shall mutatis-mutandis be applicable to the above requirement as if the
expression “public deposit” is the same as the expression “deposit” as
contemplated under the said provision.
Provided, howsoever that such Non-Banking Financial Companies
shall be entitled to invest an amount equal to or in excess of ten percent
of public deposits, in unencumbered approved securities and the remaining
in unencumbered
a.
term
deposits in any scheduled commercial bank, Small Industries Development
Bank of India (SIDBI) or National Bank for Agriculture and Rural
Development (NABARD) or
b.
bonds
issued by SIDBI or NABARD.
Provided further that, the aggregate of the amount invested
in unencumbered approved securities, term deposits and the bonds as
aforesaid shall not be less than 15 per cent of public deposits.
Chapter
– IV
Restriction on acceptance of public deposit by Non-Banking Finance
Companies
8. Minimum Credit Rating
(1) (i) No non-banking financial
company having Net Owned Fund (NOF) of twenty five lakh of rupees and above
shall accept public deposit unless it has obtained minimum investment grade
or other specified credit rating for fixed deposits from any one of the
approved credit rating agencies at least once a year and a copy of the
rating is sent to the Bank along with return on prudential norms:
Provided that those Asset Finance Companies (AFCs) that do
not get a minimum investment grade rating by March 31, 2016, shall not
renew existing deposits or accept fresh deposits thereafter. In the
intervening period, i.e. till March 31, 2016, unrated AFCs or those with a
sub-investment grade rating shall only renew the existing deposits on
maturity, and shall not accept fresh deposits, till it obtains an
investment grade rating.
(ii) in the event of upgrading
or downgrading of credit rating of any non-banking financial company to any
level from the level previously held by the non-banking financial company,
it shall within fifteen working days of its being so rated inform, the Bank
in writing, of such upgrading/downgrading.
9. Approved Credit Rating
Agencies and Minimum Investment Grade Credit Rating
The names of approved credit
rating agencies and the minimum credit rating are as follows:-
Name
of the agency
|
Minimum
Investment Grade Rating
|
(a) The Credit Rating
Information Services of India Ltd. (CRISIL)
|
FA- (FA Minus)
|
(b) ICRA Ltd.
|
MA- (MA Minus)
|
(c) Credit Analysis &
Research Ltd. (CARE)
|
CARE BBB (FD)
|
(d) Fitch Ratings India
Private Ltd.
|
tA-(ind)(FD)
|
(e) Brickwork Ratings India
Pvt. Ltd. (Brickwork)
|
BWR FBBB
|
(f) SME Rating Agency of India
Ltd.(SMERA)
|
SMERA A
|
10. Prohibition from accepting
demand deposit:
No non-banking financial company
shall accept any public deposit which is repayable on demand.
11. Period of Public Deposit:
No non-banking financial company
shall accept or renew any public deposit, unless such deposit is repayable
after a period of twelve months but not later than sixty months from the
date of acceptance or renewal thereof.
12. Ceiling on quantum of
deposit:
An asset finance company or a
loan company or an investment company or a factor
(a) having minimum NOF as
stipulated by the Bank, and
(b) complying with all the
prudential norms,
shall accept or renew public
deposit, together with the amounts remaining outstanding in the books of
the company as on the date of acceptance or renewal of such deposit, not
exceeding one and one-half times of its NOF.
Provided that an asset finance company holding public
deposits in excess of the limit of one and one-half times of its NOF shall
not renew or accept fresh deposits till such time it reaches the revised
limit.
Provided no matured public deposit shall be renewed without the
express and voluntary consent of the depositor.
13. Downgrading of Credit Rating
In the event of downgrading of
credit rating below the minimum specified investment grade as provided for
in paragraph 9 above, a non-banking financial company, being an asset
finance company or a loan company or an investment company or a factor,
shall regularise the excess deposit as provided hereunder;
(a) with immediate effect, stop
accepting fresh public deposits and renewing existing deposits;
(b) all existing deposits shall
runoff to maturity; and
(c) report the position within
fifteen working days, to the concerned Regional Office of the Bank where
the NBFC is registered.
Provided no matured public deposit shall be renewed without
the express and voluntary consent of the depositor.
14. Ceiling on the rate of
interest
No non-banking financial company
shall invite or accept or renew public deposit at a rate of interest
exceeding twelve and half per cent per annum. Interest may be paid or
compounded at rests which shall not be shorter than monthly rests.
15. Deposits from Non-Resident
Indians
No non-banking financial company
shall invite or accept or renew repatriable deposits from Non-Resident
Indians in terms of Notification
No.FEMA.5/2000-RB dated May 3, 2000 under Non-Resident
(External) Account Scheme at a rate exceeding the rate specified by the
Bank for such deposits with scheduled commercial banks.
Explanation - The period of
above deposits shall be not less than one year and not more than three
years.
16. Payment of brokerage
No non-banking financial company
shall pay to any broker on public deposit collected by or through him, -
(i) brokerage, commission,
incentive or any other benefit by whatever name called, in excess of two
per cent of the deposit so collected; and
(ii) expenses by way of
reimbursement on the basis of relative vouchers/bills produced by him, in
excess of 0.5 percent of the deposit so collected.
17. Intimation of maturity of
deposits to depositors
It shall be the obligation of
the non-banking financial company to intimate the details of maturity of
the deposit to the depositor at least two months before the date of
maturity of the deposit.
18. Renewal of public deposit
Where a non-banking financial
company permits an existing depositor to renew the deposit before maturity
for availing of the benefit of higher rate of interest, such company shall
pay the depositor the increase in the rate of interest provided that, -
(i) the deposit is renewed in
accordance with the other provisions of these directions and for a period
longer than the remaining period of the original contract; and
(ii) the interest on the expired
period of the deposit is reduced by one percentage point from the rate
which the company would have ordinarily paid, had the deposit been accepted
for the period for which such deposit had run; any interest paid earlier in
excess of such reduced rate is recovered/adjusted.
19. Payment of interest on
overdue public deposits
(1) A non-banking financial
company may, at its discretion, allow interest on an overdue public deposit
or a portion of the said overdue deposit from the date of maturity of the
deposit subject to the conditions that:
(i) the total amount of overdue
deposit or the part thereof is renewed in accordance with other relevant
provisions of these directions, from the date of its maturity till some
future date; and
(ii) the interest allowed shall
be at the appropriate rate operative on the date of maturity of such
overdue deposit which shall be payable only on the amount of deposit so
renewed:
Provided that where a
non-banking financial company fails to repay the deposit along with
interest on maturity on the claim made by the depositor, the non-banking
financial company shall be liable to pay interest from the date of claim till
the date of repayment at the rate as applicable to the deposit.
(2) In regard to the payment of
interest on such deposit which have either been seized by the government
authorities, and/or have been frozen till further clearance is received by
the concerned government authorities, the NBFCs shall follow the procedure
mentioned below:
(i) A request letter shall be
obtained from the depositor on maturity. While obtaining the request letter
from the depositor for renewal, NBFCs shall also advise the depositor to
indicate the term for which the deposit is to be renewed. In case the
depositor does not exercise his option of choosing the term for renewal,
NBFCs shall renew the same for a term equal to the original term.
(ii) No new receipt shall be
issued. However, suitable note shall be made regarding renewal in the
deposit ledger.
(iii) Renewal of deposit shall
be advised by registered letter / speed post / courier service to the
concerned Government department under advice to the depositor. In the
advice to the depositor, the rate of interest at which the deposit is
renewed shall also be mentioned.
(iv) If overdue period does not
exceed 14 days on the date of receipt of the request letter, renewal shall
be done from the date of maturity. If it exceeds 14 days, NBFCs shall pay
interest for the overdue period as per the policy adopted by them, and keep
it in a separate interest free sub-account which shall be released when the
original fixed deposit is released.
However, the final repayment of
the principal and the interest so accrued shall be done only after the
clearance regarding the same is obtained by the NBFCs from the respective
Government agencies.
20. Joint deposit
Where so desired, deposits may
be accepted in joint names with or without any of the clauses, namely,
"Either or Survivor", "Number One or Survivor/s",
"Anyone or Survivor/s".
21. Particulars to be specified
in application form soliciting public deposits
(1) No non-banking financial
company shall accept or renew any public deposit except on a written
application from the depositor in the form to be supplied by the company,
which form shall contain all the particulars specified in the Non-Banking
Financial Companies and Miscellaneous Non-Banking Companies (Advertisement)
Rules, 1977, made under section 58A of the Companies Act, 1956 (Act 1 of
1956) and also contain the specific category of the depositor, i.e. whether
the depositor is a shareholder or a director or a promoter of the company
or a member of public.
(2) The application form shall
also contain the following:-
(i) the credit rating assigned
for its fixed deposit and the name of the credit rating agency which rated
the company.
(ii) clause to the effect that
in case of non-repayment of the deposit or part thereof as per the terms
and conditions of such deposit, the depositor may approach the
Eastern/Western/ Northern/Southern (delete which are inapplicable) Bench of
Company Law Board whose full address is given hereunder:
(iii) clause to the effect that
in case of any deficiency of the company in servicing its deposit, the
depositor may approach the National Consumers Disputes Redressal Forum, the
State Level Consumers Disputes Redressal Forum or the District Level
Consumers Disputes Redressal Forum for relief;
(iv) a statement that the
financial position of the company as disclosed and the representations made
in the application form are true and correct and that the company and its
Board of Directors are responsible for the correctness and veracity
thereof;
(v) a statement to the effect
that the financial activities of the company are regulated by the Bank. It
must, however, be distinctly understood that the Bank does not undertake
any responsibility for the financial soundness of the company or for the
correctness of any of the statements or the representations made or
opinions expressed by the company; and for repayment of deposit/discharge
of liabilities by the company;
(vi) at the end of application
form but before the signature of the depositor, the following verification
clause by the depositor shall be appended:
“I have gone through the
financials and other statements / particulars / representations furnished /
made by the company and after careful consideration I am making the deposit
with the company at my own risk and volition”;
(vii) the information relating
to and the aggregate dues from the facilities, both fund and non-fund
based, extended to, and the aggregate dues from companies in the same group
or other entities or business ventures in which the directors and / or the
non-banking financial company are holding substantial interest and the
total amount of exposure to such entities.
(3) Every non-banking financial
company shall obtain proper introduction of the new depositors before
opening their accounts and accepting the deposits and keep on its record
the evidence which it has relied upon for the purpose of such introduction.
22. Advertisement and statement
in lieu of advertisement:
(1) Every non-banking financial
company soliciting public deposit shall comply with the provisions of the
Non-Banking Financial Companies and Miscellaneous Non-Banking Companies
(Advertisement) Rules, 1977 and shall also specify in every advertisement
to be issued thereunder, the following:-
(i) the actual rate of return by
way of interest, premium, bonus other advantage to the depositor;
(ii) the mode of repayment of
deposit;
(iii) maturity period of
deposit;
(iv) the interest payable on
deposit;
(v) the rate of interest which
will be payable to the depositor in case the depositor withdraws the
deposit prematurely;
(vi) the terms and conditions
subject to which a deposit will be renewed;
(vii) any other special features
relating to the terms and conditions subject to which the deposit is
accepted/renewed;
(viii) the information, relating
to the aggregate dues (including the non-fund based facilities provided to)
from companies in the same group or other entities or business ventures in
which, the directors and/or the NBFC are holding substantial interest and
the total amount of exposure to such entities; and
(ix) that the deposits solicited
by it are not insured.
(2) Where an NBFC displays any
advertisement in electronic media such as TV, even without soliciting
deposits, it shall incorporate a caption/band in such advertisements
indicating the following:
i.
As
regards deposit taking activity of the company, the viewers may refer to
the advertisement in the newspaper/information furnished in the application
form for soliciting public deposits;
ii.
The
company is having a valid Certificate of Registration dated _______ issued
by the Bank under section 45-IA of the RBI Act. However, the Reserve Bank
of India does not accept any responsibility or guarantee about the present
position as to the financial soundness of the company or for the
correctness of any of the statements or representations made or opinions
expressed by the company and for repayment of deposits/discharge of the
liabilities by the company.
(3) Where a non-banking
financial company intends to accept public deposit without inviting or
allowing or causing any other person to invite such deposit, it shall,
before accepting such deposit, deliver to the Bank for record, a statement
in lieu of advertisement containing all the particulars required to be
included in the advertisement pursuant to the Non-Banking Financial
Companies and Miscellaneous Non-Banking Companies (Advertisement) Rules,
1977 as also the particulars stated in clause (1) hereinabove, duly signed
in the manner provided in the aforesaid Rules.
(4) A statement delivered under
clause (3) above shall be valid till the expiry of six months from the date
of closure of the financial year in which it is so delivered or until the
date on which the balance sheet is laid before the company in general
meeting or where the annual general meeting for any year has not been held,
the latest day on which that meeting should have been held in accordance
with the provisions of the Companies Act, 1956 (Act 1 of 1956), whichever
is earlier, and a fresh statement shall be delivered after the expiry of
the validity of the statement, in each succeeding financial year before accepting
public deposit in that financial year.
Chapter
– V
General provisions regarding repayment of public deposit
23. Minimum lock- in period and
Repayment in the event of death of the depositor
No non-banking financial company
shall grant any loan against a public deposit or make premature repayment
of a public deposit within a period of three months (lock-in period) from
the date of its acceptance:
Provided that in the event of death of a depositor, a
non-banking financial company shall repay the public deposit prematurely,
even within the lock – in period, to the surviving depositor/s in the case
of joint holding with survivor clause, or to the nominee or the legal
heir/s of the deceased depositor, on the request of the surviving
depositor/s/nominee/legal heir, and only against submission of proof of
death, to the satisfaction of the company.
24. Repayment of public deposits
by a non-banking financial company not being a problem non-banking
financial company
Subject to the provisions
contained in paragraph 23, a non-banking financial company not being a
problem Non-Banking Financial Company may,
(i) permit premature repayment
of a public deposit at its sole discretion:
Provided such non-banking financial company shall, if so
permitted by the terms and conditions of acceptance of such deposit, repay
it prematurely at the request of the depositor, after the expiry of three
months from the date of deposit;
(ii) grant a loan up to
seventy-five percent of the amount of public deposit to a depositor after
the expiry of three months from the date of deposit at a rate of interest
two percentage points above the interest rate payable on the deposit.
25. Repayment of public deposits
by a problem non-banking financial company
Subject to the provisions
contained in paragraph 23, in order to enable a depositor to meet expenses
of an emergent nature, a problem non-banking financial company may make
premature repayment of, or grant a loan against, a public deposit in the
following cases only, namely:
(i) repay a tiny deposit in
entirety or repay any other public deposit up to an amount not exceeding
Rs.10,000/-; or
(ii) grant a loan against a tiny
deposit or up to an amount not exceeding Rs.10,000/- against any other
deposit, at a rate of interest two percentage points above the interest
rate payable on the deposit.
26. Clubbing of deposits by a
problem non-banking financial company
All deposit accounts standing to
the credit of sole/first named depositor in the same capacity shall be
clubbed and treated as one deposit account for the purpose of premature
repayment or grant of loan by a problem non-banking financial company:
Provided that this clause shall not apply to premature
repayment in the event of death of depositor as provided in paragraph 23.
27. Rate of interest on premature
repayment of public deposits
Where a non-banking financial
company, whether at its sole discretion or at the request of the depositor,
as the case may be, repays a public deposit after three months from the
date of its acceptance, but before its maturity (including premature
repayment in the case of death of the depositor), it shall pay interest at
the following rates:
After 3 months but before 6
months
|
No interest
|
After 6 months but before the
date of maturity
|
The interest payable shall be
2 per cent lower than the interest rate applicable to a public deposit
for the period for which the public deposit has run or if no rate has
been specified for that period, then 3 per cent lower than the minimum
rate at which public deposits are accepted by the non-banking financial
company.
|
Explanation: For the purpose of
this paragraph,
1. ‘problem non-banking
financial company’ means a non-banking financial company which -
i. has refused or failed to meet
within five working days any lawful demand for repayment of the matured
public deposits; or
ii. intimates the CLB under
section 58AA of the Companies Act, 1956, about its default to a small
depositor in repayment of any public deposit or part thereof or any
interest thereupon; or
iii. approaches the Bank for
withdrawal of the liquid asset securities to meet its deposit obligations;
or
iv. approaches the Bank for any
relief or relaxation or exemption from the provisions of these Directions
or from that of Non-Banking Financial Company - Systemically Important
Non-Deposit taking Company and Deposit taking Company (Reserve Bank)
Directions, 2016 for avoiding default in meeting public deposit or other
obligations; or
v. has been identified by the
Bank to be a problem non-banking financial company either suomoto or based
on the complaints from the depositors about non-repayment of public deposits
or on complaints from the company’s lenders about non-payment of dues;
2. ‘tiny deposit’ means the
aggregate amount of public deposits not exceeding Rs. 10,000/- standing in
the name of the sole or the first named depositor in the same capacity in
all the branches of the non-banking financial company.
Chapter
– VI
Miscellaneous Instructions
28. Furnishing of receipt to
depositor
(1) Every non-banking financial
company shall furnish to every depositor or his agent or group of joint
depositors, a receipt for every amount received by the company by way of
deposit.
(2) The said receipt shall be
duly signed by an officer authorised by the company in that behalf and
shall state the date of deposit, the name of the depositor, the amount in
words and figures received by the company by way of deposit, rate of
interest payable thereon and the date on which the deposit is repayable:
Provided that, if such receipts pertain to instalments
subsequent to the first instalment of a recurring deposit it may contain
only name of the depositor and date and amount of deposit.
29. Register of deposit
(1) Every non-banking financial
company shall keep one or more registers in respect of all deposits in
which shall be entered separately in the case of each depositor the
following particulars, namely: -
i.
name
and address of the depositor,
ii.
date
and amount of each deposit,
iii.
duration
and the due date of each deposit,
iv.
date
and amount of accrued interest or premium on each deposit,
v.
date
of claim made by the depositor,
vi.
date
and amount of each repayment, whether of principal, interest or premium,
vii.
the
reasons for delay in repayment beyond five working days and
viii.
any
other particulars relating to the deposit.
(2) The register or registers
aforesaid shall be kept at each branch in respect of the deposit accounts
opened by that branch of the company and a consolidated register for all
the branches taken together at the registered office of the company and
shall be preserved in good order for a period of not less than eight
calendar years following the financial year in which the latest entry is
made of the repayment or renewal of any deposit of which particulars are
contained in the register:
Provided that, if the company keeps the books of account
referred to in sub-section (1) of section 209 of the Companies Act, 1956
(Act 1 of 1956) at any place other than its registered office in accordance
with the proviso to that sub-section, it shall be deemed to be sufficient
compliance with this clause if the register aforesaid is kept at such other
place, subject to the condition that the company delivers to the Bank a
copy of the notice filed with the Registrar of Companies under the proviso
to the said sub-section within seven days of such filing.
30. Branches and appointment of
agents to collect deposits
(1) No non-banking financial
company shall open its branch or appoint agents to collect deposits except
as provided hereunder:
(i) a non-banking financial
company having the certificate of registration issued under section 45-IA
of the RBI Act and otherwise entitled to accept public deposits as per
paragraph 12 of these Directions, shall open its branch or appoint agents
if its
(a) NOF is up to Rs. 50 crore
|
Within the State where its
registered office is situated; and
|
(b) NOF is more than Rs. 50
crore and its credit rating is AA or above
|
Anywhere in India
|
(2) (i) for the purpose of
opening a branch, a non-banking financial company shall notify to the Bank
of its intention to open the proposed branch;
(ii) on receipt of such advice,
the Bank may, on being satisfied that in the public interest or in the
interest of the concerned non-banking financial company or for any other
relevant reasons to be recorded, reject the proposal and communicate the
same to the non-banking financial company;
(iii) if no advice of rejection
of the proposal under (ii) above is communicated by the Bank within 30 days
from the receipt of such advice, the non-banking financial company may
proceed with its proposal.
31. Closure of branches
(1) No non-banking financial
company shall close its branch/office without publishing such intention in
any one national level newspaper and in one vernacular newspaper in
circulation in the relevant place indicating therein the purpose and
arrangements being made to service depositors etc. and without advising the
Bank, before ninety days of the proposed closure.
(2) An intimation along with a
copy of the notice in respect of above should be sent within 7 days of its
publication in the newspapers to the Regional Office of the Bank under
whose jurisdiction the registered office of the company is located.
32. Nomination rules under
section 45QB of RBI Act
In terms of section 45QB of the
RBI Act, the depositor/s of non-banking financial company may nominate, in
the manner prescribed under the rules made by the Central Government under
section 45ZA of the Banking Regulation Act, 1949 (BRAct) one person to
whom, in the event of death of the depositor/s, the amount of deposit shall
be returned by the non-banking financial company. It has been decided in
consultation with the Government of India, that the Banking Companies
(Nomination) Rules, 1985 are the relevant rules made under section 45ZA of
the BR Act, 1949. Accordingly, non-banking financial company shall accept
nominations made by the depositors in the form similar to that specified
under the said rules.
33. Safe Custody of Liquid
Assets / Collection of Interest on SLR Securities
(1) every non-banking financial
company shall -
(i) open a Constituent's Subsidiary
General Ledger (CSGL) account with a scheduled commercial bank, or the
Stock Holding Corporation of India Ltd. (SHCIL) or a dematerialized account
with a depository through a depository participant registered with the
Securities and Exchange Board of India and keep the unencumbered approved
securities required to be maintained by it in pursuance of section 45-IB of
the RBI Act and the Directions as specified in Chapter III of these
directions in such CSGL account or dematerialised account;
(ii) designate one of the
scheduled commercial banks, in the place where the registered office of the
non-banking financial company is situated, as its designated banker and
entrust, in physical form, to such bank or the SHCIL the unencumbered term
deposits in any scheduled commercial bank maintained by it in pursuance of
directions as specified in Chapter III of these directions and such
unencumbered approved securities which have not been dematerialised;
and intimate the name and
address of such scheduled commercial bank where it has opened its CSGL
account or has held the securities in physical form, or the location of the
SHCIL where it has opened its CSGL account or has held the securities in
physical form or the depository (and the depository participant) where it has
held its dematerialised account, in writing, to the Regional Office of the
Bank under whose jurisdiction the registered office of the company is
situated, as specified in First Schedule hereto:
Provided that where a
non-banking financial company intends to entrust the securities specified
in clause (ii) above with the designated banker or SHCIL, at a place other
than the place at which its registered office is located, it may do so with
the prior approval, in writing, of the Regional Office of the Bank under
whose jurisdiction the registered office of the company is situated, as
specified in First Schedule hereto:
Provided further that the
government securities held in the said CSGL account or dematerialised
account, shall not be traded, either by entering into ready forward
contracts, including reverse ready forward contracts, or otherwise, except,
by following the procedure and to the extent, as hereinafter specified.
(2) The securities mentioned in
sub-paragraph (1) above shall continue to be kept as specified therein for
the benefit of the depositors and shall not be withdrawn or encashed or
otherwise dealt with by the non-banking financial company except for
repayment to the depositors with the prior approval of Reserve Bank of
India:
Provided that,
(i) a non-banking financial
company may withdraw a portion of such securities in proportion to the
reduction of its public deposits duly certified to that effect by its
auditor;
(ii) where the non-banking
financial company intends to substitute such securities kept in physical
form, it may do so by entrusting securities of equal value to the
designated bank or SHCIL before such withdrawal; and
(iii) the market value of these
securities shall, at no point of time, be less than the percentage of
public deposits as specified in the directions as specified in Chapter III
of these directions.
(3) Where the non-banking
financial company intends to trade, either by entering into ready forward
contracts, including reverse ready forward contracts, or otherwise, in the
government securities that are held in excess of the requirement under
section 45-IB of the Act and directions as specified in Chapter III of
these directions, the same shall be undertaken by opening a separate CSGL
or dematerialised account for keeping such excess government securities.
(4) In order to protect the
interest of depositors, an exclusive CSGL or demat account to hold
Government securities shall be maintained for securities held for the
purpose of compliance with section 45-IB of the Act. This account shall be
operated only for purchase or sale of securities due to increase or
decrease in the quantum of public deposits or withdrawal of securities for
encashment on maturity or for repayment to depositors in special
circumstances.
(5) It may be possible that
there may be a few Government securities / Government guaranteed bonds that
have not been dematerialized and are held in physical form which for the
purpose of collection of interest are withdrawn from the safe custody with
their designated bankers and re-deposited with the banks after collection
of interest. To avoid the process of withdrawal and re-depositing the
non-banking financial company shall authorize the designated banks as
agents for collection of interest on due dates on these securities held in
physical form and lodged for safe custody. Non-Banking Financial Company
may approach its designated banker and exercise a Power of Attorney in
favour of the designated bank to enable it to collect interest on the
securities / guaranteed bonds held in physical form on the due date.
34. Employees Security Deposit
A non-banking financial company
receiving any amount in the ordinary course of its business as security
deposit from any of its employees for due performance of his duties shall
keep such amount in an account with a scheduled commercial bank or in a
post office in the joint names of the employee and the company on the
conditions that -
(i) it shall not withdraw the
amount without the consent in writing of the employee; and
(ii) the amount shall be
repayable to the employee along with interest payable on such deposit
account unless such amount or any part thereof is liable to be appropriated
by the company for the failure on the part of the employee for due
performance of his duties.
35. Information to be included
in the Board's report
(1) In every report of the Board
of Directors laid before the company in a general meeting under sub-section
(1) of section 217 of the Companies Act, 1956 (Act 1 of 1956), there shall
be included in the case of a non-banking financial company, the following
particulars or information, namely:-
(i) the total number of accounts
of public deposit of the company which have not been claimed by the
depositors or not paid by the company after the date on which the deposit
became due for repayment; and
(ii) the total amounts due under
such accounts remaining unclaimed or unpaid beyond the dates referred to in
clause (i) as aforesaid.
(2) The said particulars or
information shall be furnished with reference to the position as on the
last day of the financial year to which the report relates and if the
amounts remaining unclaimed or undisbursed as referred to in clause (ii) of
the preceding sub-paragraph exceed in the aggregate a sum of rupees five
lakhs, there shall also be included in the report a statement on the steps
taken or proposed to be taken by the Board of Directors for the repayment
of the amounts due to the depositors remaining unclaimed or undisbursed.
36. Copies of balance sheet and
accounts together with the Directors' report and notes on accounts to be
furnished to the Bank
(1) Every non-banking financial
company accepting/holding public deposit shall deliver to the Bank an
audited balance sheet as on the last date of each financial year and an
audited profit and loss account in respect of that year as passed by the
company in general meeting together with a copy of the report of the Board
of Directors laid before the company in such meeting in terms of section
217(1) of the Companies Act, 1956 (Act 1 of 1956) within fifteen days of
such meeting as also a copy of the report and the notes on accounts
furnished by its Auditor.
37. Information with respect to
change of address, directors, auditors, etc. to be submitted
Every non-banking financial
company shall, not later than one month from the occurrence of any change
in the following matters, intimate to the Reserve Bank of India: -
(i) the complete postal address,
telephone number/s and fax number/s of the registered/corporate office;
(ii) the names and residential
addresses of the directors of the company;
(iii) the names and the official
designations of its principal officers;
(iv) the specimen signatures of
the officers authorised to sign on behalf of the company; and
(v) the names and office address
of the auditors of the company.
38. Cover for public deposits -
creation of floating charge on Liquid Assets
In order to ensure protection of
depositors interest, non-banking financial company shall ensure that at all
times there is full cover available for public deposits accepted by it.
(1) While calculating this cover
the value of all debentures (secured and unsecured) and outside liabilities
other than the aggregate liabilities to depositors shall be deducted from
the total assets. Further, the assets should be evaluated at their book
value or realizable / market value whichever is lower for this purpose. It
shall be incumbent upon the non-banking financial company concerned to
inform the Regional Office of the Bank wherein it is registered, in case
the asset cover calculated as above falls short of the liability on account
of public deposits. Non-banking financial companies accepting / holding
public deposits shall create a floating charge on the statutory liquid
assets invested in terms of section 45-IB of the Act, in favour of their
depositors. Such charge shall be duly registered in accordance with the
requirements of the Companies Act, 1956.
(2) Non-banking financial
companies shall create the floating charge on the statutory liquid assets
maintained in terms of section 45-IB of the RBI Act and in terms of
notifications issued by the Bank from time to time, in favour of their
depositors through the mechanism of 'Trust Deed'.The charge is required to
be registered with the Registrar of Companies and the information in this
regard is required to be furnished to the trustees and the Bank. A copy of
the 'Draft Trust Deed' containing the details in this regard is enclosed as Annex I for the guidance of the non-banking
financial companies. The 'Trustee Guidelines' are also enclosed as Annex II.
39. Non-banking financial
company failing to repay public deposit prohibited from making loans and
investments
A non-banking financial company
which has failed to repay any public deposit or part thereof in accordance
with the terms and conditions of such deposit, as provided in section 45QA
(1) of the RBI Act, shall not grant any loan or other credit facility by
whatever name called or make any investment or create any other asset as
long as the default exists.
40. Restrictions on investments
in land and building and Unquoted shares
(1) No AFC, which is accepting
public deposit, shall, invest in-
a.
land
or building, except for its own use, an amount exceeding ten per cent of
its owned fund;
b.
unquoted
shares of another company, which is not a subsidiary company or a company
in the same group of the non-banking financial company, an amount exceeding
ten per cent of its owned fund.
(2) No loan company or
investment company, which is accepting public deposit, shall, invest in -
a.
land
or building, except for its own use, an amount exceeding ten per cent of
its owned fund ;
b.
unquoted
shares of another company, which is not a subsidiary company or a company
in the same group of the non-banking financial company, an amount exceeding
twenty per cent of its owned fund:
Provided that the land or
building or unquoted shares acquired in satisfaction of its debts shall be
disposed off by the non-banking financial company within a period of three
years or within such period as extended by the Bank, from the date of such
acquisition if the investment in these assets together with such assets
already held by the non-banking financial company exceeds the above
ceiling;
Explanation. - While calculating the ceiling on investment in
unquoted shares, investments in such shares of all companies shall be
aggregated.
Provided further that the
ceiling on the investment in unquoted shares shall not be applicable to an
Asset Finance Company or a loan company or an investment company in respect
of investment in the equity capital of an insurance company upto the extent
specifically permitted, in writing, by the Bank.
Chapter
- VII
Reporting Requirements
41. The reporting requirements in respect of NBFC-D as
prescribed by Department of Non-Banking Supervision shall be adhered to by
the non-banking finance company.
Chapter
- VIII
Interpretations
42. For the purpose of giving effect to the provisions of
these Directions, the Bank may, if it considers necessary, issue necessary
clarifications in respect of any matter covered herein and the
interpretation of any provision of the Directions given by the Bank shall
be final and binding on all the parties concerned.Non-compliance with the
Directions shall invite penal action under the provisions of the RBI Act.
Further, these provisions shall be in addition to, and not in derogation of
the provisions of any other laws, rules, regulations or directions, for the
time being in force.
43. Further, the supersession of the Non-Banking Financial Companies (Reserve Bank)
Directions, 1998 contained in Notification No.DFC.114/DG (SPT)-98 dated
January 2, 1998 and in Notification No.DFC.114/DG (SPT)-98
dated January 2, 1998 shall not in any way affect -
(i) any right, obligation or
liability acquired, accrued or incurred thereunder;
(ii) any penalty, forfeiture or
punishment incurred or suffered in respect of any contravention committed
thereunder; and
(iii) any investigation, legal
proceeding or action in respect of any such right, privilege, obligation,
liability, penalty, forfeiture or punishment taken or arising under the
said directions,and any such investigation, legal proceeding or action may
be instituted, continued, or enforced and any such penalty, forfeiture or
punishment may be imposed as if those directions had not been superseded.
Chapter
- IX
Repeal Provisions
44. With the issue of these Directions, the instructions /
guidelines contained in the following circulars issued by the Bank stand
repealed (list as provided below).All approvals / acknowledgements given
under the above circulars shall be deemed as given under these directions.
Notwithstanding such repeal, any action taken/purported to have been taken
or initiated under the instructions/guidelines having repealed shall
continue to be guided by the provisions of said instructions/guidelines.
Sr.
No.
|
Circular
No.
|
Date
|
Subject
|
1
|
DFC(COC).No.111/ED(SG)/97
|
June 18, 1997
|
Non-Banking Financial
Companies (Reserve Bank) Directions 1977
|
2
|
DNBS (COBW) No.CC
02/02.01/97-98
|
January 01, 1998
|
Non-Banking Financial
Companies (Reserve Bank) Directions, 1998 - Regulations over Deposit
taking Activities (vide Notification No. 114 of 2-1-1998)
|
3
|
Notification
DFC.114/DG(SPT)-98
|
January 02, 1998
|
NBFC (Reserve Bank)
Directions, 1998
|
4
|
DNBS PD.No.CC 04/02.01/97-98
|
January 31, 1998
|
Non-Banking Financial
Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998 -
Modifications of Regulations (vide Notification No. 118 of 31-1-1998)
|
5
|
Notification
No.DNBS.127/CGM(VSNM)-98
|
December 18, 1998
|
NBFC Acceptance of Public
Deposits (Reserve Bank) Directions, 1998
|
6
|
DNBS.(PD).CC.No.11/02.01/99-2000
|
November 15, 1999
|
Amendments to NBFC Regulations
|
7
|
Notification No.
DNBS.134/CGM(VSNM)-2000
|
January 13, 2000
|
NBFC Acceptance of Public
Deposits (Reserve Bank) Directions, 1998
|
8
|
Notification
DNBS.141/CGM(VSNM)-2000
|
June 30, 2000
|
NBFC Acceptance of Public
Deposits (Reserve Bank) Directions, 1998
|
9
|
DNBS(PD)CC.No.14/02.01/2000-01
|
March 31, 2001
|
Amendments to NBFC Regulations
- Ceiling on Rate of Interest
|
10
|
DNBS.(PD).CC.No.16/02.01/2000-01
|
June 27, 2001
|
Amendments to NBFC Regulations
|
11
|
DNBS(PD).CC.No.18/02.01/2001-02
|
January 01, 2002
|
RBI Regulations for NBFCs
|
12
|
DNBS.PD.CC.No.21/02.01/2002-03
|
October 01, 2002
|
Non-Banking Financial
Companies - Amendments to Regulations (i) Transaction in Government
Securities
|
13
|
DNBS(PD)C.C.No.27/02.05/2003-04
|
July 28, 2003
|
Nomination Rules under Section
45QB of RBI Act for NBFC Deposits
|
14
|
Notification
DNBS.170/CGM(OPA)-2003
|
July 31, 2003
|
NBFC Acceptance of Public
Deposits (Reserve Bank) Directions, 1998
|
15
|
DNBS (PD)
C.C.No.30/02.01/2003-04
|
September 17, 2003
|
Non-Banking Financial
Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998 -
Interest Rate on NRI Deposits
|
16
|
DNBS(PD)C.C.No.32/02.01/2003-04
|
October 28, 2003
|
Non-Banking Financial
Companies (NBFCs) Miscellaneous Non-Banking Companies (MNBCs) and
Residuary Non-Banking Companies (RNBCs) - Interest Rate on NRE Deposits
|
17
|
DNBS.(PD)C.C.No.33/02.01/2003-04
|
October 30, 2003
|
Non-Banking Financial
Companies, Miscellaneous Non-Banking Companies and Residuary Non-Banking
Companies - Interest Rate on NRI Deposits
|
18
|
DNBS (PD)
CC.No.36/02.01/2003-04
|
April 20, 2004
|
Non-Banking Financial
Companies, Miscellaneous Non-Banking Companies and Residuary Non-Banking
Companies - Interest Rate on NRI Deposits
|
19
|
DNBS(PD)CC
No.37/02.02/2003-04
|
May 17, 2004
|
Collection of Interest on SLR
Securities
|
20
|
DNBS
(PD)C.C.No.44/02.01/2004-05
|
October 05, 2004
|
Premature Repayment of Public
Deposits or Deposits
|
21
|
DNBS.(PD).C.C.No.47/02.01/2004-05
|
February 7, 2005
|
Cover for 'Public Deposits'
|
22
|
DNBS.(PD)C.C.No.60/02.01/2005-06
|
December 09, 2005
|
Premature Repayment of Public
Deposits or Deposits
|
23
|
DNBS.PD.CC.No.85/03.02.089/2006-07
|
December 06, 2006
|
Mid-Term Review of the Annual
Policy 2006-07
|
24
|
DNBS(PD)C.C
No.87/03.02.004/2006-07
|
January 04, 2007
|
Cover for Public Deposits -
Creation of Floating Charge on Liquid Assets
|
25
|
DNBS.(PD)/CC.No.91/03.02.034/2006-07
|
April 04, 2007
|
Advertisement in Electronic
Media
|
26
|
DNBS(PD)CC.No.92/03.02.089/2006-07
|
April 24, 2007
|
Amendments to NBFC Regulations
- Ceiling on Rate of Interest
|
27
|
DNBS(PD)CC.No.131/03.05.002/2008-2009
|
October 29, 2008
|
Enhancement of NBFCs' Capital
Raising Option for Capital Adequacy Purposes
|
28
|
DNBS (PD)
CC.No.203/03.10.001/2010-2011
|
October 22, 2010
|
Long Term Infrastructure
Finance Bonds issued by Infrastructure Finance Companies (IFCs) under
section 80CCF of the Income Tax Act, 1961- Exemption from the definition
of “public deposit”
|
29
|
DNBS.PD.CC.No.272/03.10.01/2011-12
|
May 11, 2012
|
Acceptance of Public Deposits
Directions, 1998 - Eligible Credit Rating Agencies - Rating of Fixed
Deposits by Brickwork Ratings Pvt Ltd (Brickwork)
|
30
|
DNBS.PD/CC.No.350/03.02.001/2013-14
|
July 04, 2013
|
Payment of Interest on Overdue
Public Deposits
|
31
|
DNBS.(PD).CC.No.410/03.10.001/2014-15
|
September 25, 2014
|
Rating of Fixed Deposits of
NBFCs - Eligible Credit Rating Agencies - SME Rating Agency of India Ltd.
(SMERA)
|
32
|
DNBR.(PD).CC.No.018/03.10.001/2014-15
|
February 06, 2015
|
Credit Rating of Fixed
Deposits of NBFCs - Change in Rating Scale of Brickwork Ratings India
Private Limited (Brickwork)
|
33
|
DNBR.(PD).CC.No.021/03.10.001/2014-15
|
February 20, 2015
|
Raising Money through Private
Placement of Non-Convertible Debentures (NCDs) by NBFCs
|
34
|
DNBR.010/CGM.(CDS)-2015
|
March 27, 2015
|
Non-Banking Financial
Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998
(Amendment)
|
(C.
D. Srinivasan)
Chief General Manager
First
Schedule
(Please
see paragraph 33 of the Directions)
Area under the jurisdiction of each Regional Office of the
RESERVE
BANK OF INDIA
Name
and address of the Office
|
Area
under jurisdiction
|
1. Ahmedabad Regional Office,
La Gajjar Chambers,
Ashram Road,
Ahmedabad-380 009.
|
State of Gujarat and Union
Territories of Daman and Diu
and Dadra and Nagar Haveli
|
2. Bangalore Regional Office,
10-3-8, Nrupathunga Road,
Bangalore-560 002.
|
State of Karnataka.
|
3. Bhopal Regional Office,
Hoshangabad Road,
Post Box No.32,
Bhopal-462 011.
|
States of Madhya Pradesh and
Chhattisgarh
|
4. Bhubaneswar Regional Office
Pandit Jawaharlal Nehru Marg,
Post Bag No.16,
Bhubaneswar-751 001.
|
State of Orissa.
|
5. Kolkata Regional Office,
15, NetajiSubhas Road,
Kolkata 700 001.
|
States of Sikkim, and West
Bengal and the UnionTerritory
of Andaman and Nicobar Islands
|
6. Chandigarh Regional Office,
11, Central Vista,
New Office Building
Opp. Telephone Bhavan,
Sector 17,Chandigarh-160 017.
|
States of Himachal Pradesh,
Punjab and the Union
Territory of Chandigarh.
|
7. Chennai Regional Office,
Fort Glacis, RajajiSalai,
Chennai-600 001.
|
State of Tamil Nadu and Union
Territory of Pondicherry.
|
8. Guwahati Regional Office,
Station Road, Pan Bazar,
Post Box No.120,
Guwahati-781 001.
|
States of Arunachal Pradesh,
Assam, Manipur, Meghalaya,
Mizoram, Nagaland and Tripura.
|
9. Hyderabad Regional Office,
6-1-56, Secretariat Road,
Saifabad,
Hyderabad-500 004.
|
State of Andhra Pradesh and
Telangana
|
10. Jaipur Regional Office,
Ram Bagh Circle,
Tonk Road, P.B.No.12,
Jaipur-302 004.
|
State of Rajasthan.
|
11. Jammu Regional Office,
Rail Head Complex,
Post Bag No.1,
Jammu-180 012.
|
State of Jammu and Kashmir.
|
12. Kanpur Regional Office
Mahatma Gandhi Marg,
Kanpur - 208 001
|
States of Uttar Pradesh and
Uttaranchal
|
13. Mumbai Regional Office,
Reserve Bank of India Building,
3rd Floor,
Opp. Mumbai Central Station
Byculla, Mumbai-400 008
|
States of Goa and Maharashtra
|
14. New Delhi Regional office,
6, SansadMarg,
New Delhi-110 001.
|
State of Haryana and
National Capital Territory
of Delhi.
|
15. Patna Regional Office,
South of Gandhi Maidan,
Post Bag No.162,
Patna-800 001.
|
States of Bihar and Jharkhand
|
16. Thiruvananthapuram
Regional Office,
Bakery Junction,
Thiruvananthapuram-695 033.
|
State of Kerala and Union
Territory of Lakshadweep.
|
Annex
I
Draft
Trust Deed
This Trust Deed is made at
………………………. this ………. day ……… 2007 between . …………………..Company Ltd.
incorporated under the Companies Act,1956 having its registered office at
………………… …………………. (hereinafter referred to as "The Company") of
the One Part, and ………………………………. Company Ltd. incorporated under the
Companies Act, 1956/………………………Bank constituted / incorporated under
the…………………………………………… Act, and having its registered office at ………….
………………………….. the trustees (hereinafter referred to as "The Trustees")
of the Other Part.
Whereas by its Articles of
Association, the Company is authorized to borrow, or raise and secure the
payment of money by inviting deposits.
And Whereas the Directors of the
Company being duly empowered by the Articles of Association of the Company
have decided by a resolution passed in the meeting of the Board held on the
…………….. day of ………. 200…to raise deposits from the public under various
schemes.
And as per the instructions of
the Reserve Bank of India ,the Company has to create charge of the Deposit
Holders on the securities purchased by it under the provisions of section
45-IB of the Reserve Bank of India Act,1934 and the amount deposited in
term deposits with the banks in terms of Chapter III of these Directions as
amended by the Reserve Bank of India from time to time.
And Whereas the Company proposes
to create charge of the Deposit Holders on the securities purchased by the
Company as required under section 45-IB of the Reserve Bank of India Act
1934 and the amount deposited in term deposits with the banks in terms of
Chapter III of these Directions.
And whereas the said Trustees
mentioned above have consented to act as Trustee of the Deposit Holders by
its resolution dated ……… passed by its Board of Directors.
NOW THIS DEED WITNESSETH AND IT
IS HEREBY MUTUALLY AGREED TO AND DECLARED BY AND BETWEEN THE PARTIES HERETO
AS FOLLOWS:
1. Unless there be something in
the subject or context inconsistent therewith, the following expressions
shall have the meaning hereinafter mentioned that is to say:
(a) "The Company"
means M/s………………….. Company Ltd.
(b) "The Trustees"
means ………………….. Company Ltd. incorporated under the Companies Act,
1956/…………… Bank constituted / incorporated under the …………Act, and having
its registered Office at ……………………….. .
(c) "Deposits" means a
deposit accepted by the Company for the time being outstanding and entitled
to the benefits of these presents.
(d) "Deposit holders"
means holders for the time being of the deposit receipt and entered in the
register of deposit holders mentioned on the conditions endorsed on the
deposit certificates for the holder of the deposits.
(e) "Charged
Securities" means the securities owned by the Company and invested by
it under the provisions of section 45-IB of the Reserve Bank of India Act,
1934 ( in CSGL Account No. ……………….. maintained with …………….. and / or in
Account in Demat securities deposited with M/s ,the Depository and in
physical form and / or the amount deposited in fixed deposits with the
banks in terms of notifications issued by the Bank from time to time in
this regard.
(f) "Act" means the
Companies Act, 1956 (1 of 1956) and any modification or re-enactment
thereof.
(g) "Specified
bankers" means the banks in which the company keeps the charged
securities and any part thereof, an intimation to which will be given to
the trustees and the Reserve Bank of India.
The words denoting the singular
include the plural and vice-versa, unless the contrary appears from the
context.
2. The deposits entitled to the
benefit of these presents shall consist of total amount already deposited
by the depositors with the company and to be deposited in future to rank
paripassu without preference or priority by reason of the date of issue or
otherwise and secured by the charge hereby created on securities.
3. The Company hereby covenants
with the trustees that the Company on the maturity of the deposits or such
earlier days (the maturity of these deposits will take place after the
completion of the maturity period of the respective deposits) as amounts
shall become payable, will pay the deposit holders the amount secured by
their deposit respectively and in the meantime will pay interest to the
deposit holders on the day it become due in case, the deposit holders have
opted for monthly or periodical payment of interest.
4. All payments due by the
Company in respect of the deposits certificates issued hereunder whether of
interest or principal shall be made by cheque / warrant / DD / pay order by
the Company and the Company shall make at its own expenses all arrangements
for the smooth payment of the principal as well as the interest amount on
the said deposits.
5. In consideration of the
deposits hereby authorized and the deposits to be collected in future the
Company as the beneficial owner, hereby create charge with the trustees on
all the securities purchased by it under the provisions of section 45-IB of
the Reserve Bank of India Act 1934, and the amount deposited in term
deposits with the banks in terms of Chapter III of these Directions
amounting to Rs…………… (Rupees only) existing as well as the securities
purchased by the Company in future under the provisions of section 45-IB of
the Reserve Bank of India Act ,1934 and the amount deposited in term
deposits with the banks in terms of Chapter III of these Directions for the
benefit of deposit holders for the amounts due and all other charges,
expenses and other dues, the payment of which has been secured by a charge
on the securities under these presents and the charge as created has been
as the floating charge. The trustees may at any time, by notice in writing
to the Company, convert the said floating charge into a fixed charge and
get it registered as legal charge in case the trustees are of the opinion
that the said securities are in danger of being seized or sold under any
sort of distress or execution leveled or threatened or in any other case.
6. The Company hereby undertakes
that after the execution of these presents, it shall register the charge
hereby created, with the Registrar of Companies under section 125 of the
Companies Act, 1956 and furnish the information of the registration of the
charge to the Trustees and the Reserve Bank of India .The Company shall
also register the trustee's lien on the securities with the concerned bank
/ depository or any other authority and will advise the Trustees and the
Reserve Bank of India about the same.
7. The Company shall hold and
enjoy all the charged securities until the security hereby constituted
shall become enforceable under the terms of these presents in which case
the Trustees may in their discretion as next hereinafter mentioned or shall
upon the request in writing of the 90% deposit holders by value take
possession of the charged securities or any of them and may in the like
discretion and shall sell, call in, collect and convert into money the same
or any part thereof with full power to sell any of the said securities
either together or in parcels, and either for a lump sum or for a sum
payable by instalments or for a sum on account and a mortgage or charge for
the balance and with full power sale to make any special or other
stipulations as to title or evidence or commencement of the title, or
otherwise, which the Trustees shall deem proper and with full powers to
modify or rescind or vary any contract for sale of the said securities or
any part thereof and to re-sell the same without being responsible for any
loss which may be occasioned thereby and with full power to compromise and
effect compositions and for the purposes aforesaid or any of them to execute
and do all such assurances and things as they think fit.
8. The amounts due to the
deposit holders under this indenture shall become immediately payable and
the security hereby constituted shall become enforceable within the meaning
of these presents in each and any of the following events :
a.
If the
Company makes default in ensuring the full cover for public deposits as
stipulated in Chapter III of these Directions.
b.
If the
Company without the consent of the deposit holders ceases to carry on its
business or indicates its intentions to do so.
c.
If an
order has been passed by the Court of competent jurisdiction or a special
resolution has been passed by the members of the Company for winding up of
the company.
d.
If the
Company makes defaults in complying with the orders passed by Company Law
Board or any other authority constituted under the Companies Act, 1956
directing the company to pay the amount to the deposit holders.
e.
If in
the opinion of the Trustees, the security of the deposit holders is in
jeopardy.
9. As soon as the amount shall
become payable and the security enforceable under the preceding clause 8
(and unless the time for payment and the security to be enforced has been
expressly extended by the deposit holders by a resolution passed with
simple majority), the Trustees shall take possession of the charged
securities and shall forthwith take steps to realize the charged securities
and distribute the amount to the deposit holders on pro rata basis.
10. Until the happening of any
of the events mentioned in clauses No. 8 & 9 of this Indenture, the
Trustees shall not in any manner interfere with the management of affairs
of the said business except to the extent he may consider necessary for the
preservation of the charged property or any part thereof or ensuring the
full cover for deposits as indicated in Clause 8 (a) of these presents.
11. The Trustees shall apply the
proceeds of such sale or other mode of realization in the following manner,
that is to say, that the Trustees shall pay :
a.
In the
first place all costs, charges and expenses in or about such sale or the
performance or execution of trust or otherwise in relation to these
presents or otherwise in respect of the security, including the
remuneration of the trustee, if any.
b.
Secondly,
the amount then due and owing to deposit holders
c.
And
lastly, the surplus, if any, to the Company or its assignee.
Provided that if the said money
shall be insufficient to pay all such amounts in full, then the said
amounts shall be paid rateably and without preference or priority among all
deposit holders according to the amount due in respect of the deposits held
by them.
12. When all the amount secured
by these presents been paid and satisfied, the Trustees shall forth with
upon the request and at the cost of the Company and on being paid all the
costs, charges and expenses properly incurred by the said Trustees in
relation to the security, re-convey, reassign, release and surrender the
charged securities or so much of the same as shall not have been sold or
disposed of to the Company or its assigns.
13. The Company hereby covenants
with the Trustees:
a.
That
the moneys secured by this deed shall have the first charge on the charged
securities
b.
That
the Company shall keep the said charged securities and any part thereof
with the specified bankers.
c.
That
the Trustees will have a right to verify the charged securities at any time
and the Company will give its full co-operation to the Trustees in this
regard.
d.
The
company shall file a copy of the return as prescribed by Department of
Non-Banking Supervision to the Trustees.
14. The Company shall pay to the
Trustees all legal, travelling and other costs, charges and expenses
incurred by them in connection with execution of trust of these presents
including costs, charges and expenses of and incidental to the approval and
execution of these presents and all other documents affecting the security
herein and will indemnify them against all actions, proceedings, costs,
charges, expenses, claims and demands whatsoever which may arise or be
brought or made against or incurred by him in respect of any matter or
thing done or permitted to be done without their wilful default in respect
of or in relation to the charged securities.
15. The Trustees of the deposit
holders will execute and exercise all or any of the trusts power,
authorities and discretion so vested in them by these presents in a
judicious and fair manner and will not be held responsible except for the
breach of trust knowingly and intentionally committed by them.
16. In the event of winding up
of the Trustees, another Trustee will be appointed having all the powers,
authorities as stated under these presents and such appointment will be
made by the board of directors of the Company.
17. The Trustees may by
agreement with the directors of the Company modify the terms of this deed
in any manner that may be necessary to meet any requirement or contingency,
provided that they are satisfied that such modifications are in the
interest of the deposit holders.
18. The Company hereby covenants
with the Trustees that Company will at all times during the continuance of
the security carry on and conduct its business in proper and efficient
manner with due diligence and efficiency and will take all possible steps
to keep the charged securities intact and will keep proper books of account
as required under the Act and give all information to the said Trustees in
relation to discharge of his duties under these presents.
19. The Company hereby further
covenants with the Trustees that the Company shall duly perform and observe
the obligations, hereby imposed upon it by this Trust.
IN WITNESS WHEREOF THE COMPANY
has caused its common seal to be affixed to these presents and the Trustees
have hereto set their hands the day and year above written.
Witnesses
Common
Seal of the Company affixed in the presence of
(Director)
(Director)
(Trustee)
(Trustee)
Annex
II
Liquid
Assets (Non-Banking Finance Companies) Trustees Guidelines
1. These Guidelines shall be
called the Reserve Bank of India Guidelines for Trustees of deposit holders
of the deposit taking NBFC.
2. No company / bank shall be
entitled to act as a Trustee of deposit holders unless it is a scheduled
commercial Bank or Limited company engaged in trust business with minimum
capital of Rs 50 lakh and who are independent and have no relationship with
the company its principal shareholders or Directors of the Company.
3. The duties of every trustee
of deposit holders will be
(i) To execute the trust deed
with the company for the protection of interest of the deposit holders.
(ii) To do the duties of the
trustees as enshrined in the Trust Deed executed with the company.
(iii) To take possession of the
property charged in accordance with the provisions of the trust deed.
(iv) Enforce security in the
interest of deposit holders.
(v) To do such acts or as are
necessary in the event the security becomes enforceable.
(vi) To carry out such acts as
are necessary for the protection of interest of the depositors.
(vii) Ascertain and satisfy
himself that the
a.
The
interest due on the deposits had been paid by the company on or before the
due dates.
b.
The
deposit holders had been paid the monies due to them on the date of maturity
of the deposit.
c.
Exercise
due diligence to ensure compliance by the company of the provisions of the
trust deed.
d.
To
take appropriate measures for protecting the interest of the deposit
holders, as soon as any breach of the trust deed comes to the notice.
e.
To
inform the Reserve Bank of India as soon as any breach of the trust deed
comes to his notice.
f.
To
communicate with the Regional Office of RBI, under whose jurisdiction the
company is registered, on half yearly basis the compliance of trust deed by
the company, defaults if any in payment of interest to the deposit holders
and action taken.
4. The trustees for the deposit
holders shall call or cause to be called by the company a meeting of all
deposit holders.
a.
On a
requisition in writing signed by at least 51% of the deposit holders in
value for the time being outstanding.
b.
The
happening of any event which constitute a default for which in the opinion
of the trustees the security of the deposit holders is in jeopardy.
A report of such meeting may be
forwarded to the Regional Office of the Reserve Bank of India, Department
of Non-Banking Supervision under whose jurisdiction the company is
registered.
5. The trustee may inspect books
of account, records, register of the company and the trust property to the
extent necessary for discharging his obligations with prior intimation to
the Regional Office of RBI in whose jurisdiction the NBFC is registered.
6. The trustees for deposit
holders shall not make untrue statement or suppress any material in any
documents, reports, papers or information furnished to the Reserve Bank of
India.
7. The trustee for deposit
holders shall ensure that the Reserve Bank of India is promptly informed
about any action, legal proceedings etc. initiated against him in respect
of any material breach or non-compliance by it, of any law, rules
directions of the Reserve Bank of India or of any other regulatory
authority.'
8. The trustee for deposit
holders shall not delegate any of his functions to any employee or agent.
However, the trustee may employ employees, agents, Advocates or any other
professional for any routine or clerical functions. In case the trustee
employs any employee, he will be responsible for his / their acts or
omissions in respect of the conduct of his / their business.
|