BANKING AFFAIRS

Detailed explanation-1: -The NBFCs are allowed to accept/renew public deposits for a minimum period of 12 months and maximum period of 60 months.

Detailed explanation-2: -The maturity period of public deposits is between six months and three years, so a company cannot rely on them for long-term financing. A large number of public deposits may prove challenging to collect, mainly if the deposits are large.

Detailed explanation-3: -companies with NOF of Rs. 25 lakhs and above as well as minimum investment grade credit rating can accept public deposits not exceeding 1.5 times of NOF provided they have CRAR of 15 per cent or above with immediate effect. legislative and regulatory framework for NBFCs.

Detailed explanation-4: -In a notification on Thursday, the Reserve Bank of India said that the minimum holding period requirement for non-banking finance company originating loans, will now be set at six monthly or two quarterly installments. Earlier the holding period was 12 months.

Detailed explanation-5: -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.