Imphal, Oct 3 (UNI) The Manipur Finance department and Reserve Bank of India(RBI), Guwahati, here today organised a seminar on functioning of Non-Banking Financial Companies(NBFC) in the state.
The RBI and state Finance officials while interacting with the NBFC members, informed that the NBFC could not use the words - ''banks'' and ''limited'' and they should be careful while using the name of their organisation.
The RBI regulates the NBFC to ensure healthy growth of the financial companies, ensure that the companies function as a part of the financial system within the policy framework and the quality of surveillance and supervision exercised by the bank over the NBFCs is sustained by keeping pace with the developments that take place in this sector of the financial system.
An NBFC should be registered under the Companies Act, 1956, and is engaged in the business of loans and advances, acquisition of shares, stock, bonds, debentures, securities issued by the government or local authority or other securities of like marketable nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agricultural activity, industrial activity, sale, purchase or construction of immovable property.
The officials said an NBFC could not accept demand deposits. A company incorporated under the Companies Act and desirous of commencing NBFC business should have sound financial capability.
The interest should be paid as per rules laid down by the RBI, officials added.
The seminar was attended by finance and bank officials attended the seminar where the RBI officials urged the financial corporations to stick to the rule.