RBI has permitted non banking finance companies (NBFCs) to enter the.....business through the joint venture route.

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

RBI has permitted non banking finance companies (NBFCs) to enter the____business through the joint venture route.

A	Mutual Fund
B	Insurance
C	Universal Banking
D	Merchant Banking

Explanation:

Detailed explanation-1: -The Reserve Bank has been given the powers under the RBI Act 1934 to register, lay down policy, issue directions, inspect, regulate, supervise and exercise surveillance over NBFCs that meet the 50-50 criteria of principal business.

Detailed explanation-2: -Any non-banking financial company (NBFC) registered with RBI having net owned fund of Rs. 500 lakhs as per the last audited balance sheet would be permitted to undertake insurance business as agent of insurance companies on fee basis, without any risk participation.

Detailed explanation-3: -NBFCs offer products/services which include leasing and hire-purchase, corporate loans, investment in non-convertible debentures, IPO funding, margin funding, small ticket loans, venture capital, etc.

Detailed explanation-4: -Eligibility Criteria to act as Insurance Agent It should have a net worth of Rs. 5 Crores as per the latest audited balance sheet. Fulfilling these two criteria allows the NBFC to undertake insurance business, on a fee basis, as an agent of the insurance companies without any risk participation.

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