L.

S RAHEJA COLLEGE OF ARTS AND

COMMERCE
JUHU ROAD, SANTACRUZ (W), MUMBAI 400
054
A PROJECT REPORT ON
NON BANKING FINANCIAL COMPANY
Submitted by NIKHIL HIRANANDANI
IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS OF
T.Y.B.COM (FINANCIAL MAREKTS)
(SEMESTER V)
PROJECT GUIDE
Prof NAVEEN ROHATGI
UNIVERSITY OF MUMBAI
2010 2011

DECLARATION

I hereby declare that I have successfully completed the project

on NON BANKING FINANCIAL COMPANY for the
academic year 2010-2011. The project is done under the
guidance of Prof. Naveen Rohatgi and is submitted in the partial
fulfillment of the requirements for the award of the degree of
Bachelor of Commerce (Financial Markets)
The information provided in the project is true and to the best of
my knowledge.

Signature of the Student

Nikhil Hiranandani
Roll No: 13
T.Y.B. Com (Financial Markets)

CERTIFICATE
This is to certify that Mr. NIKHIL HIRANANDANI student of
TY-B.Com (Financial Markets) Semester V of L. S Raheja
College of Arts & Commerce has successfully completed the
project on Non Banking Financial Company under the
guidance of Prof. Naveen Rohatgi for the academic year 20102011.

Project Guide
Naveen Rohatgi

Principal

College Seal
Course Co-ordinator
(Prof. Abdul Kadir Khan)
External Guide

ACKNOWLEDGEMENT

This project is the culmination of a study into the wide gamut of activities
carried on NON BANKING FINANCIAL COMPANY. This project would
just not have been complete without the valuable contributions from
various people whom I have interacted with in the course of its completion.
I would like to express my sincere gratitude to all those people who have in
their own ways helped me to complete this project. I begin by thanking my
Project Guide Prof. Naveen Rohatgi and my course coordinator Prof.
Abdul Khan, the treasure trove of information who has rallied strongly
behind me to see me complete this project. Without him this project would
have remained just an idea, without form or content.
Last but not the least I want to thank the Librarians and the Computer Lab
operators as well as the Raheja College of Commerce for going out of their
way in rendering help in providing books and other facilities.

EXECUTIVE SUMMERY

This Project emphasises and focuses Non Banking Finance Company

(NBFC) and the role of it in todays period of rapid `financial isation'. An
NBFC is a business entity whether incorporated under the Companies
Act, 1956 or not which devotes its resources in providing to the society
the financial services of various descriptions that are distinct from normal
Banking services.
The forte of NBFCs has been credit delivery to areas not covered by
banks and financial institution (FI). By virtue of their past experience
NBFCs know the tacit needs of retail customers much better and with
more sensitivity than others do.
The merit of non banking finance companies lies in the higher level of
their customer orientation. Their services are marked with simplicity and
speed. They provide tailor made service to their clients. NBFCs cater to
the needs of those borrowers who remain outside the purview of the
commercial banks as a result of monetary and credit policy of Reserve
Bank of India. In addition, marginally higher rates of interest on deposit
offered by NBFCs also attract a large number of depositors.
This project has helped me to enhance my understanding and improve the
knowledge about Non Banking Finance Company.
Hypothesis: `Difference between bank and NBFC narrowing'

INDEX

SR. NO:
1
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
2
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
3
3.1
4
4.1
4.2
5
5.1
5.2
5.3
5.4
5.5

TOPIC
INTRODUCTION TO NBFC

5.7
5.8

1-4

DEFINATION
STATUTORY DEFINATION UNDER RBI ACT.
NON BANK FINANCE COMPANY
INTIALY 1998 N.B.F.C
N.B.F.C REGISTERD WITH RBI
BACKGROUND

5-15

MAJOR COMPONENTS
TYPES
CURRENT SCINARIO
SERVICE
DIFFRENCE BETWEEN
IMPORTANCE
CLASIFICATION
REGULATION OF N.B.F.C

16

REGISTRATION WITH RBI

LIBERALIZATION MEASURE FOR N.B.F.C

17-19

N.B.F.C DIRECTIONS
CATEGORIZATION OF COMPANY
RBI ACT 1997
TASK FORCE ON N.B.F.C 1998
RESERVE BANK ACT 2000
RATIONALISATION OF REGULATION FOR
N.B.F.C

5.6

PAGE NO:

ELIGIBILITY CRITERIA
ALM
RATIONALISATION OF GUIDLINE

20-24

N.B.F.C FOR INVESTOR

25

SILENT FEATURES OF N.B.F.C

28

TECHNICAL TERMS THAT NEEDS TO BE

30

UNDERSTOOD
ROLE OF N.B.F.C

31

10

QUESTIONS FREQUENTLY ASKED

32

11

N.B.F.C SHOULD BE ENCOURAGED

35

12

BANKING/NBFC PARTICIPATION

36

13

RBI & N.B.F.C NORMS FOR FOREIGN BANKS

38

14

ENTRY OF RELIANCE IN TO N.B.F.C 2008

40

15

IL & FS INVESTMENT MART

41

16

BMW INDIA TO INVEST

43

17

ARTICLE ON THE ECONOMIC TIMES

45

18

BANKS FACING TOUGH COMPETITION

47

19

SUMMARY

48

20

REFRENCE

54

21

QUESTIONNARISE

55