NON BANKING FINANCIAL COMPANIES (NBFC)
The Reserve Bank of India (RBI) has recently launched the ombudsman scheme for NBFC. The banking ombudsman is a quasi judicial authority appointed by the RBI. It aims to provide a cost effective grievance redressal mechanism to customers for deficiency in certain banking services.
All scheduled commercial banks regional rural banks and primary co-operative banks are covered under this scheme.
The complaint has to be first filled in the respective banks before approaching ombudsman.
RBI also widened the scope of banking ombudsman scheme to bring mobile banking and electronic banking issues within its purview.
Banks will be responsible for deficiencies arsing out of sale of insurance, mutual funds other third part investment products that banks sells but were not earlier held responsible.
The pecuniary jurisdiction of the banking ombudsman to pass a judgment has been increased to INR 20 lakhs.
Ombudsman can award compensation of upto INR 1 lakh to the complaint for loss of time, expenses incurred as also, harassment and mental anguish suffered.
It would provide a cost free and expeditious compliant redressal mechanism relating to deficiency in the services by NBFCs covered under the scheme.
To begin with the scheme will cover all deposit taking NBFC. Based on the experienced gained, the RBI would extend the scheme to cover NBFC having asset size of rs 1 billion & above with customer interface.
One or more officers at the RBI not below the rank of general manager may be appointed as ombudsman for tenure of 3years.
Powers of ombudsman to call for information from concerned NBFC & power to award compensation not exceeding 1 lakh rupees.
The complaint NBFC has the option to appeal against the decision of the ombudsman before the appellate authority
An NBFC is a company registered under the companies act 1956 engaged in the business of loans & advances, acquisition of securities issued by government, insurance business, chit business etc but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods or providing any services and sale, purchase , construction of immovable property
They are registered by and are registered with RBI under section 45-1a of the RBI act 1934.
NPCI (NATIONAL PAYMENT CORPORATION OF INDIA)
IT is an umbrella organization for all retail payments system in India. It was set up with the guidance and support of the reserve bank of India (RBI) and Indian banks association (IBA)
IT has been incorporated as a Not for PROFIT company under the new section 8 of companies act 2013. it has launched various initiatives:-
- Unified payment interface
- Bharat interface for money (BHIM)
- Bharat QR code
- Rupay card.
NABARD NATIONAL BANK FOR AGRICULTURE AND DEVELOPMENT
Recently the parliament passed amendment to the national bank for agriculture and rural development act 1981. empowers the central government to increase the authorized capital of NABARD from rs 5000 crore to rs 30000 crore.
Transfers the RBI balance equity of rs 20000 crore in NABARD to the central government.
Consistency with the companies act 2013- the bill substitutes references to provisions of the companies act 1956 under the NABARD act 1981, with references to the companies act, 2013. these include provisions that deal with 1) definition of the government company
- Qualifications of auditor
It is an apex development bank of country and is engaged in agricultural credit and others economic activities to rural areas.
- Provides refinancing facilities to bank
- Promotes rural industries, small scale and cottage industries
- Provides funds to state government for undertaking development and promotional activities in rural areas.
- Financing R& D of agricultural and rural industries.
- Finance for promoting non farm activities and employment in non farm sectors
- Inspection work of co-operative banks and regional rural banks
- SHAKTI INITIATIVE OF NABARD
It aims for digitization of self help groups (SHG) in 100 districts.
It was initiated to address certain concerns like improving the quality of book keeping of SHGs and to enable banks to take informed credit decisions about the group.
It further aims at integrating SHG members with the national financial inclusion agenda.
MONETARY POLCIY COMMITTEE (MPC)
GOI will constitute a Monetary policy committee (MPC) which will determine the policy (repo) rate required to achieve the Inflation target. The MPC has 6 members:
> 3 members (RBI including governor)
> 3 (appointed by GOI)
Monetary policy committee and monetary policy framework were introduced in the RBI act 1934 through finance act 2016.
> Current account convertibility means rupee can be converted into foreign currencies and foreign currencies in to rupee at market rate (nominal exchange rate) for any transactions under the current account of Bop.
> Capital account convertibility means rupees can be converted into foreign currencies & Foreign currencies into rupee at market rate for any transactions under capital account of BOP. Rbi puts various restrictions if anybody would like to convert its rupee into dollar for purchase of shares, other assets abroad which is part of capital account.
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