Financial services

NBFC

Meaning

Different categories of NBFC

legislation on NBFCs

Regulation of NBFCs

     Two compulsory prerequisites

      Computation of NOF

Procedure for obtaining registration

Processing of application by RBI

Cancellation of registration

Procedure for cancellation of registration

Appellate remedy

NBFCs exempted from registration

Lease

Meaning

Parties

Types

Salient features of Financial lease

Salient features of Operating lease

Hire purchase

Meaning

Condition

Modus operandi of HP system

Operating Lease & Financing lease

Basis	Financing	Operating
Life of contract
Maintenance
Cancellation
Duration
Risk of obsolescence
cost of Assets

HP & lease

Basis	HP	Lease
Ownership
Down payment
Depreciation
Maintenance
Capitalization
Tax Benefit
Risk of obsolescence
Reporting

HP & Installment Payment

Basis	HP	Installment
Ownership
Call option

Factoring

Types

• Recourse and non-recourse factoring
• Advance and maturity factoring
• Disclosed and undisclosed factoring
• domestic and export/cross border factoring

Function of factor

• Maintenance/administration of sales ledger
• collection of facility
• financing trade debts
• credit control and credit protection
• Advisory services

Advantage of factoring

• convertibility
• definite pattern of cash inflows
• Reduction in collection & administration costs
• Compensating balance are not required

Factoring and forfaiting

Functions of merchant banker