Prudential Norms for Non-Banking Financial Companies
The Reserve Bank of India has issued directions for non-banking financial (deposit accepting or holding) companies, effective from February 22, 2007.
The directions apply to all non-banking financial companies, including those engaged in infrastructure sub-sectors.
The directions cover various aspects, including:
Income Recognition: Income from investments and accounting standards for investments.
Asset Classification: Classification of assets, provisioning requirements, and disclosure in the balance sheet.
Provisioning Requirements: Percentage of provision required for doubtful assets, based on the period for which the asset has been considered doubtful.
Audit Committee: Constitution of an audit committee by non-banking financial companies.
The directions aim to ensure prudential norms and transparency in the operations of non-banking financial companies.
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