2010 Live Project Report at Imantec

2010
Live Project Report

@
IMANTEC
Group
Introduction
MANJESH RAJPUT (38) - PRIMARY DATA COLLECTION

NEHA BHOLA (44) - SERVEY QUESTIONARY
NIRAJ PRASAD (48) - PRESENTATION
NIVEDITA CHATERJEE (50) - MIS
Non –Banking Financial Inclusions
WHAT IS NBFS?
DIFFRENCE BETWEEN NBFC AND BANK
IT IS NESSESARY THAT ALL NBFC SHOULD REGISTERED
WITH RBI
DIFFERENT TYPE OF NBFC REGISTERED WITH RBI
DOCUMENTS REQURIED FOR REGISTRATION
MERIT AND DEMERITS OF NBFCS
IMPACT IN FINANCIAL INCLUSION
Meaning
•Non-bank financial companies (NBFCs) are

financial institutions that provide banking
services without meeting the legal definition
of a bank, i.e. one that does not hold a
banking license.
Difference Between NBFC’s and BANK
(i) A NBFC cannot accept demand deposits (demand

deposits are funds deposited at a depository institution
that are payable on demand -- immediately or within a
very short period -- like your current or savings accounts.
(ii) it is not a part of the payment and settlement system

and as such cannot issue cheques to its customers.
(iii) deposit insurance facility of DICGC is not available for

NBFC depositors unlike in case of banks.
Necessary Registered with RBI’s
In terms of Section 45-IA of the RBI Act, 1934, it is mandatory

that every NBFC should be registered with RBI to commence or
carry on any business of non-banking financial institution as
defined in clause (a) of Section 45 I of the RBI Act, 1934.
However, to obviate dual regulation, certain category of NBFCs
which are regulated by other regulators are exempted from the
requirement of registration with RBI viz. venture capital
fund/merchant banking companies/stock broking companies
registered with Sebi, insurance company holding a valid
certificate of registration issued by IRDA,
companies as notified under Section 620A of the Companies
Act, 1956, chit companies as defined in clause (b) of Section 2 of
the Chit Funds Act, 1982 or housing finance companies
regulated by National Housing Bank.
Different type of NBFC’s Registered with RBI
The NBFCs that are registered with RBI are:

(i) equipment leasing company;
(ii) hire-purchase company;
(iii) loan company;
(iv) investment company.
With effect from December 6, 2006 the above NBFCs

registered with RBI have been reclassified as
(i) Asset Finance Company (AFC)
(ii) Investment Company (IC)
(iii) Loan Company (LC)
Documents required for Registration
A company incorporated under the Companies Act, 1956 and

desirous of commencing business of non-banking financial
institution as defined under Section 45 I(a) of the RBI Act,
1934 should have a minimum net owned fund of Rs 25 lakh
(raised to Rs 2 crore from April 21, 1999).
The company is required to submit its application for

registration in the prescribed format along with necessary
documents for bank's consideration. The bank issues
certificate of registration after satisfying itself that the
conditions as enumerated in Section 45-IA of the RBI Act, 1934
are satisfied.
Merits of NBFC’s
Suppliers of loans and credit facilities.

Supporting investment in properties.
Funding private education.
Wealth management such as managing portfolios of
stocks and shares.
Advice companies in mergers and acquisitions.
Discounting services e.g. discounting of instruments.
Cont…
 Underwrite stocks and shares, TFCs and other

obligations.
 Retirement planning.
 Trading money market instruments.
 Prepare feasibility, market or industry studies for
companies.
Demerits of NBFC’s
An NBFC cannot accept demand deposits.
An NBFC is not a part of the payment and settlement

system and as such an NBFC cannot issue cheques on itself.
Deposit insurance facility of DEPOSIT INSURANCE AND

CREDIT GUARANTEE CORPORATION is not available for
NBFC depositors unlike in case of banks.
Financial Inclusions
Financial inclusion is the delivery of financial

services at affordable costs to vast sections of
disadvantaged and low income groups.
Concept of Financial Inclusions
Financial inclusion is the availability of banking services at an

affordable cost to disadvantaged and low-income groups. In
India the basic concept of financial inclusion is having a
saving or current account with any bank. In reality it includes
loans, insurance services and much more These accounts
either have a low , minimum or nil balance with some
restriction in transactions. The individual bank has the
authority to decide whether the account should have zero or
minimum balance. Financial inclusion mainly focuses on the
poor who do not have formal financial institutional support
and getting them out of the clutches of local money lenders.
Shortcomings of financial Inclusions
The interaction with the NGOs and the SHGs brought to light
underpinning problems of financial inclusion, which are briefly
stated as under :
• Poverty: being on a low income, especially out of work and on

benefits.
• Ignorance: low levels of awareness and understanding of

products caused by lack of appropriate marketing or low levels of
financial literacy.
Cont…
• Environment: lack of access to financial services caused

by several factors, including:geographic access to bank
branches or remote banking facilities; affordability of
products such as insurance, where premiums often price
out those living in the most deprived and risky areas;
suitability of products like current accounts, which offer an
overdraft and an easy route to debt.
• Cultural and psychological barriers , such as language,

perceived / actual racism and suspicion or fear of financial
institutions.
Role in Economic Development
Financial inclusion is an essential pre-condition to building

uniform economic development, both spatially and temporally,
and ushering in greater economic and social equity. There are
several government and non-government programmes aimed
at reducing poverty and bringing greater equity in the country.
But few have proved to be inherently productive and
sustainable. Financial inclusion can transform them into
productive and self-sustainable projects . The micro-credit
programme launched through numerous Non Government
Organizations has found fancy with the banking industry and
can prove to be an excellent tool to bring in greater equity
through financial inclusion.
Cont…..
No-frills account when promoted extensively plough backs
the returns from these projects into bank coffers, thus
encouraging the savings habit and ensuring that banks act as a
repository of savings and sources of credit. This will make
banking, enter into the daily routine of a common man.
Besides nurturing the habit of saving among the masses, it will
remove the apprehensions and fear from their mind towards
the financial products and services.
 In a way provision of easy credit will encourage the first

generation entrepreneurs to initiate new venture; aggravate
the capital formation in the society; create new employment
opportunities and thus will help in escalating the economic
development of the country. This also will automatically lower
the increasing crime rates in the society.
To Recapitulate
1.This institutions are mainly built for poor level people but in
this according to our survey we conclude that poor family are
not aware for this , but middle family prefer this and higher
family is also not prefer this ; but some time or some people
prefer this.
2.The analysis and reallocation of workload responsibilities; the

assurance of fair treatment; equal access to resources; and the
implementation of existing policies and the initiation of new
policies
and procedures.
3. Needed is someone who will enforce the policies that exist.

There is just so much disregard of the current policies. That has
a way of checking on whether things are being enforced.
Our Learning
•GOT TO KNOW ABOUT NBFCS

•ABOUT FINANACIAL INCLUSION
•HOW NBFCS WORK
•DIFFRENCE BETWEEN NBFCS AND BANK
Resources to report
WWW.REDIFF.COM
WWW.RBI.ORG.IN
WWW.WIKIPEDIA.COM
WWW.BUSINESSWORLD.COM
VISITING MOOTHOOR FINANCE
Doubts & solutions
This is the question and answers slide.

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2010

Live Project Report

MANJESH RAJPUT (38) - PRIMARY DATA COLLECTION

•Non-bank financial companies (NBFCs) are

(i) A NBFC cannot accept demand deposits (demand

(ii) it is not a part of the payment and settlement system

(iii) deposit insurance facility of DICGC is not available for

In terms of Section 45-IA of the RBI Act, 1934, it is mandatory

The NBFCs that are registered with RBI are:

With effect from December 6, 2006 the above NBFCs

A company incorporated under the Companies Act, 1956 and

The company is required to submit its application for

Suppliers of loans and credit facilities.

 Underwrite stocks and shares, TFCs and other

An NBFC cannot accept demand deposits.

An NBFC is not a part of the payment and settlement

Deposit insurance facility of DEPOSIT INSURANCE AND

Financial inclusion is the delivery of financial

Financial inclusion is the availability of banking services at an

• Poverty: being on a low income, especially out of work and on

• Ignorance: low levels of awareness and understanding of

• Environment: lack of access to financial services caused

• Cultural and psychological barriers , such as language,

Financial inclusion is an essential pre-condition to building

 In a way provision of easy credit will encourage the first

2.The analysis and reallocation of workload responsibilities; the

3. Needed is someone who will enforce the policies that exist.

•GOT TO KNOW ABOUT NBFCS

This is the question and answers slide.

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