Which of the following regulators regulate the NBFCs in India 1 Reserve Bank of India 2 Security and...........

Economic Affairs Non Banking Financial Companies (NBFCs)

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Which of the following regulators regulate the NBFCs in India?

1. Reserve Bank of India

2. Security and Exchange Board of India

3. Insurance Regulatory Development Authority

4. National Housing Bank

Select the correct answer using the codes given below.

1 only

2&3 only

3&4 only

All the above

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Explanation:

In terms of Section 45-IA of the RBI Act, 1934, no Non-banking Financial company can commence or carry on business of a non-banking financial institution without a) obtaining a certificate of registration from the Bank and without having a Net Owned Funds of ? 25 lakhs (? Two crore since April 1999).
However, in terms of the powers given to the Bank, to obviate dual regulation, certain categories of the NBFCS which are regulated by other financial regulators are exempted from the regulatory control of the RBI:
•Venture capital fund, merchant bank, stock broking firms (SEBI registers and regulates them);
•Insurance company (registered and regulated by the IRDA);
•Housing finance company (regulated by the National Housing Bank);
•Nidhi company (regulated by the Ministry of Corporate Affairs under the Companies Act, 1956);
•Chit fund company (by respective state governments under Chit Funds Act, 1982).
Do you know?
•RBI, the regulator of the NBFCs, has given a very wide definition of such companies (a kind of ‘umbrella’ definition)— “a financial institution formed as a company involved in receiving deposits or lending in any manner.”
THINK!
•Some of the important regulations relating to acceptance of deposits by the NBFCs.