Finance may be defined as the art and service of managing money. The two major areas of finance are.
1) Financial management managerial finance corporate finance.
II) Finance services.
Financial management is concerned with duties of the financial manager in the business firm who perform such varied tasks as budgeting financial forecasting,cash management credit administration investment analysis funds management and so on financial services is concerned with the design and delivery of advice and financial products to individuals and business within the areas of banking and related institution.
Personal financial planning investment real assets and so on. A wide variety of funds assets based and non- fund based advisory services are provided mainly by the non-banking finance compsnies(NBFCs).
Non-banking financial company(NBFC)
It means i) A financial institution that is a company.
ii) A non-banking institution that business is the receiving of deposits under any scheme arrangements in any other manner or lending in any manner.
iii) Such other non-banking institution class of institution as the RBI may specify with the prior approval of the government and by notification in the official Gazette
Scope of NBFC
The direction supply to a NBFC which is defined to include only non-banking institution that is any purchase finance investment loan of mutual benefit financial company and an equipment leasing company but excludes an insurance company stock exchange .
Stockbroking company merchant banking company.The directions are ads not applicable to NBFCs that do not accept/hold public deposit.NBFCs have to pass a resolution in a meeting of the have neither accepted nor would accept any public deposit doing the year to the effect that they have neither accepted nor would accept any public deposit during the year.
Repayment of deposit by a non problem NBFC
A non-problem NBFC may
1)Permit premature repayment of a public deposit at its sole direction.
2)Grant a laon upto 75 percent of the deposit after 3 month from the date of deposit at a rate of interest percent points above the rate of interest payable on the deposits.
Repayment by a problem NBFC
A problem NBFC means a NBFC which
i) Has refused to meet within 5 days lawful demand for repayment of a matured deposit.
ii) Intermate the company law Board under section 58-AA of the companies act about its default to a depositor in repayment of any part of it’s any interest on it.
iii) approaches the RBI for withdrawal of liquid asset securities to meet deposit obligation, or for any relief relaxation from the provisions of the RBI public.
iv) It has been identified by the RBI to be ment of public deposits/dues. Such a company may, to enable a depositor to meet expenses of an emergent nature l, prematurely(a) repay a tiny deposit that is aggregate amount not exceeding Rs.10000 in the name of the sole/first named depositor in all the branches of the NBFC) in entirely upto rs.percentage points above the rate of interest payable on the deposit.
For the purpose of premature repayment, all deposit accounts standing to the credit of sole first a named depositor should be clubbed and treated as one account. Where an NBFC prematurely repays a public deposit for any of the reason. a) after 3 months but more than 6 months not interest b) after 6 months but before maturity 2 percent lower than the interest applicable to a deposit for the period for which the concerned deposit has run. If no rate has been specified for that period l, 3 percent lower than the minimum rate at which public deposit is are accepted by the NBFC.
Deposits Receipts- All NBFC have to furnish deposit joint deposits or their agents with a receipt of the deposit stating the date of deposit name of the depositors, the amount of deposit (in words and figure), rate of interest and date of maturity. It must be signed by an officer who can act on behalf of the company in this regard.
Register of deposits- All NBFCs have to keep register of deposit, containing cache depositor particular as detailed below .
a) Name and address,
b) Date and amount of each deposit
C) Duration and due date of each deposit.
d) Date and amount of accrued interest premium on each deposit.
e) Date of claim made by depositor,
f) Date and amount of each repayment of principal/ interest.
g) Reason for delay in repayment beyond five working days and
h) Any other particulars relating to the deposits.