BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The NBFC should have a minimum Net Owned Funds (NOF) of Rs.300 crore
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Its net NPAs should be less than 3% of net advances
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It should have been in existence for at least 5 years
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All of the above
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Detailed explanation-1: -What are the eligibility parameters for NBFCs as sponsors of IDF-MF? Ans : NBFCs desirous of sponsoring IDF-MFs are required to comply with the following requirements : The NBFC should have a minimum Net Owned Funds (NOF) of Rs. 300 crore; and Capital to Risk Weighted Assets (CRAR) of 15%;
Detailed explanation-2: -Financial activity as principal business is when a company’s financial assets constitute more than 50 per cent of the total assets and income from financial assets constitute more than 50 per cent of the gross income. A company which fulfils both these criteria will be registered as NBFC by RBI.
Detailed explanation-3: -As regards deposits collected by persons authorised by NBFCs including brokers/agents etc. inasmuch as such persons are collecting the deposits on behalf of the NBFC, it shall be the sole responsibility of the NBFC to ensure full compliance with the KYC guidelines by such persons.
Detailed explanation-4: -8.1 Under the earlier qualifying assets criteria 1, a Non-banking Financial Company-Microfinance Institution (NBFC-MFI) is required to have minimum 85 per cent of its net assets 2 as ‘qualifying assets’.
Detailed explanation-5: -NBFC cannot accept demand deposits; NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself; deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks.