Overview of NBFCs

1. Overview of NBFCs

2. NBFCs : OVERVIEW • 13000+ players registered under RBI : A & B categories • Spread all across the country • Approx. 570 NBFCs authorized to accept public deposits (Catg. A) • Assets worth Rs. 15000 Crore financed annually & growing steadily • Asset financing • Commercial vehicles • Passenger cars • Multi-utility & multi-purpose vehicles • Two-wheelers & Three-wheelers • Construction equipments • Consumer durables

3. Role of NBFCs • As recognized by RBI & Expert Committees / Taskforce • Development of sectors like Transport & Infrastructure • Substantial employment generation • Help & increase wealth creation • Broad base economic development • Irreplaceable supplement to bank credit in rural segments • major thrust on semi-urban, rural areas & first time buyers / users • To finance economically weaker sections • Huge contribution to the State exchequer

4. Role of NBFCs (Contd..) • 70-80% of Commercial Vehicles are finance driven • Indian economy is more dependent on roads • Heavy Govt. outlay for mega road projects • Heavy replacement demand anticipated – 30 lacs commercial vehicles by the year 2007 • Another Rs.6000 Crores required for phasing out old commercial vehicles • CRISIL in its study has placed commercial vehicle financing under “low risk” category • Each commercial vehicle manufactured, sold and financed gives employment to minimum 20 persons (direct and indirect)

5. Customer Service • The key factor for our survival & growth • NBFCs provide prompt, tailor made service with least hassles. This more than compensates for the higher lending rates of NBFCs as compared to Banks & FIs • All customers get direct and easy access to and individual attention of the top management • NBFCs cater to a class of borrowers who :- - Do not necessarily have a high income - But have adequate networth - Are honest and sincere (gauged by the personal touch maintained with them).

6. Customer Service (Contd..) • Weak and Fly by Night operators have been weeded out by RBI • Deposit mobilization at the doorstep of the depositors with personalized approach, interest warrants are delivered in advance • NBFCs provide financial assistance to their borrowers in case of emergency needs • NBFCs provide assistance and guidance to their customers in matters relating to insurance

7. FIDC - Introduction • Self Regulatory Organization for RBI Registered NBFCs • Deposit Taking NBFCs to be enrolled in the beginning • Registered as a Section 25 Company • Head Office in Mumbai with Regional Chapters started at Delhi, Kolkata, Chennai and Jalandhar • Code of Conduct & Fair Business Practices has been formulated and enforced • Full recognition from MOF & RBI – Invited for Pre-Budget & Credit Policy discussions • Equal representation to small & big NBFCs in the – Managing Committee

8. FIDC - Purpose • FIDC has been formed with a very clear focus • To protect the interest of its members • To promote Asset Finance Business • To represent to Govt., RBI & various statutory & Trade Bodies • To promote brotherhood amongst members • To ensure fair and ethical practices among its members • To bring NBFCs on the mainstream of the financial sector of the country

9. FIDC - Benefits / Services To Members • Code of Conduct • Standardization of Practice • System Manual • Risk Management • Defaulters List • Compilation of Data / Statistics • Pool of Funding / Contingency Fund • Recovery Agents • Trainings / Seminars / Workshops • Web – Site • Members Directory • Journal • Grievance Forum

10. Recovery & Repossession • Procedure • Notice to the borrower & the guarantor on default • Seizure by authorized repossession agents • Signing of seizure list by financier & borrower / representative • Intimation to the police by dialing 100 & in writing to the local police station immediately after repossession • Final notice to the borrower : To pay & release the asset • Compliance of procedure by authorized repossession agent