{"id":114956,"date":"2021-06-26T10:55:22","date_gmt":"2021-06-26T05:25:22","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=114956"},"modified":"2021-07-01T11:43:28","modified_gmt":"2021-07-01T06:13:28","slug":"rbi-issues-guidelines-for-nbfcs-to-declare-dividend","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/rbi-issues-guidelines-for-nbfcs-to-declare-dividend\/","title":{"rendered":"RBI issues guidelines for NBFCs to declare dividend"},"content":{"rendered":"\n<h5><b><span data-contrast=\"none\">What is the News?<\/span><\/b><span data-ccp-props=\"{&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/h5>\n<p><span data-contrast=\"none\">The Reserve Bank of India(RBI) has issued guidelines that spell out the eligibility criteria for non-banking finance companies(NBFCs) to declare dividends.<\/span><\/p>\n<h5><b><span data-contrast=\"none\">What is Dividend?<\/span><\/b><span data-ccp-props=\"{&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/h5>\n<ul>\n<li data-leveltext=\"\u25cf\" data-font=\"Symbol\" data-listid=\"51\" aria-setsize=\"-1\" data-aria-posinset=\"113\" data-aria-level=\"1\"><b><span data-contrast=\"none\">Dividend\u00a0<\/span><\/b><span data-contrast=\"none\">is a sum of money paid regularly (typically annually) by a company to its shareholders out of its profits (or reserves).<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<\/ul>\n<h5><b><span data-contrast=\"none\">What is NBFC?<\/span><\/b><span data-ccp-props=\"{&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/h5>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"52\" aria-setsize=\"-1\" data-aria-posinset=\"114\" data-aria-level=\"1\"><span data-contrast=\"none\">A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956. It is a company which\u00a0has\u00a0<\/span><b><span data-contrast=\"none\">principal business of receiving deposits under any scheme or arrangement<\/span><\/b><span data-contrast=\"none\">\u00a0in one lump sum or in installments by way of contributions or in any other manner<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"52\" aria-setsize=\"-1\" data-aria-posinset=\"115\" data-aria-level=\"1\"><span data-contrast=\"none\">It engages in business activities\u00a0of loans and advances, acquisition of shares\/stocks\/bonds\/debentures\/securities issued by Government or local authority<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"52\" aria-setsize=\"-1\" data-aria-posinset=\"116\" data-aria-level=\"1\"><span data-contrast=\"none\">It will also engage in business activities such as other marketable securities like nature, leasing, hire-purchase, insurance business, chit business.\u00a0<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"52\" aria-setsize=\"-1\" data-aria-posinset=\"117\" data-aria-level=\"1\"><span data-contrast=\"none\">The definition of\u00a0<\/span><b><span data-contrast=\"none\">NBFCs\u00a0does not include<\/span><\/b><span data-contrast=\"none\">\u00a0any institution whose principal business is that of\u00a0<\/span><b><span data-contrast=\"none\">agriculture activity, industrial activity, purchase or sale of any goods\u00a0<\/span><\/b><span data-contrast=\"none\">(other than securities) or\u00a0<\/span><b><span data-contrast=\"none\">providing any services and sale\/purchase\/construction of immovable property<\/span><\/b><span data-contrast=\"none\">.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"52\" aria-setsize=\"-1\" data-aria-posinset=\"118\" data-aria-level=\"1\"><b><span data-contrast=\"none\">Features of NBFCs<\/span><\/b><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li data-leveltext=\"o\" data-font=\"Courier New\" data-listid=\"52\" aria-setsize=\"-1\" data-aria-posinset=\"24\" data-aria-level=\"2\"><span data-contrast=\"none\">NBFC\u00a0<\/span><b><span data-contrast=\"none\">cannot accept demand deposits<\/span><\/b><span data-contrast=\"none\">.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"o\" data-font=\"Courier New\" data-listid=\"52\" aria-setsize=\"-1\" data-aria-posinset=\"25\" data-aria-level=\"2\"><span data-contrast=\"none\">NBFCs<\/span><b><span data-contrast=\"none\">\u00a0do not form part of the payment and settlement system<\/span><\/b><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"o\" data-font=\"Courier New\" data-listid=\"52\" aria-setsize=\"-1\" data-aria-posinset=\"26\" data-aria-level=\"2\"><span data-contrast=\"none\">Further, NBFCs\u00a0<\/span><b><span data-contrast=\"none\">cannot issue cheques drawn on itself<\/span><\/b><span data-contrast=\"none\">.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"o\" data-font=\"Courier New\" data-listid=\"52\" aria-setsize=\"-1\" data-aria-posinset=\"27\" data-aria-level=\"2\"><span data-contrast=\"none\">Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><b><span data-contrast=\"none\">Source:\u00a0<\/span><\/b><a href=\"https:\/\/epaper.livemint.com\/Home\/MShareArticle?OrgId=25671600e84&amp;imageview=0\"><b><span data-contrast=\"none\">Livemint<\/span><\/b><\/a><span data-ccp-props=\"{&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is the News?\u00a0 The Reserve Bank of India(RBI) has issued guidelines that spell out the eligibility criteria for non-banking finance companies(NBFCs) to declare dividends. What is Dividend?\u00a0 Dividend\u00a0is a sum of money paid regularly (typically annually) by a company to its shareholders out of its profits (or reserves).\u00a0 What is NBFC?\u00a0 A Non-Banking Financial&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/rbi-issues-guidelines-for-nbfcs-to-declare-dividend\/\">Continue reading <span class=\"screen-reader-text\">RBI issues guidelines for NBFCs to declare dividend<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[8043,1566,3127,9],"tags":[],"class_list":["post-114956","post","type-post","status-publish","format-standard","hentry","category-current-affairs-cat","category-daily-factly-articles","category-economy","category-public","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704601977},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/114956","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=114956"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/114956\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=114956"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=114956"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=114956"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}