Non-Banking Financial Services in India
NBFCs are functioning in India like the way banks are functioning, though they are different from banks on various counts. They are not authorized to accept demand deposits and are not a part of the payment and settlement system and as such, cannot issue cheques to their customers. Further, statutory deposit insurance facility is not available for NBFC depositors, unlike in case of banks. The total asset/ liability of Non-Banking Financial Companies (NBFCs) in India as on March 2006 is INR 35,561 Crore.
The Reserve Bank of India (RBI), the regulatory authority, currently regulates three classes of NBFCs viz. (i) Asset Finance Companies, (ii) Investment Companies and (iii) Loan Companies. It also regulates Residuary Non-Banking Companies. FDI up to 100% is permissible in the NBFC sector subject to the minimum capitalization norms. The Reserve Bank of India Act, 1934 is the basic sectoral law regarding NBFCs.
Insurance in India
Insurance is one of the most rapidly growing sectors in India. It has been intensifying its growth and broadening its reach proportionate to the rapid growth of the Indian economy. The total investment by the insurance industry has grown by 13.66% during the year 2005-06. The investments by the life insurers and non-life insurers during the said period have increased by 13.7% and 13.15% respectively.
The Insurance Regulatory and Development Authority is the licensing authority in the sector. The Insurance Ombudsman handles complaints of aggrieved insured persons. FDI upto 26% is permitted through automatic route subject to licensing by the licensing authority. The compendium of sectoral laws comprises the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, the General Insurance Business (Nationalization) Act, 1972, the Insurance Regulatory and Development Authority Act, 1999 and the Marine Insurance Act, 1963.
CLG Non-Banking Financial Services Practice
CLG has considerable expertise on a wide range of legal and regulatory issues pertaining to NBFC sector:-
- Advised NBFCs on issues such as:
- Issuance of commercial papers
- Net owned fund
- Fit and proper norms
- Capital adequacy norms
- Ceiling on credit/ investment concentration
- Know your customer norms
- Repossession of the assets on default
- Bank finance to NBFCs
- Mode of employment for NBFCs
- Facilitated regulatory clearances;
- Facilitated Entry Routing and business set-up of various Multinational companies.
CLG Insurance Practice
- Advised clients on various aspects of insurance sector – Insurance, Reinsurance and Captive Insurance
- Facilitated Regulatory Clearances
- Drafted, on behalf of Government of India, the law and rules for Offshore Insurance Sector
- Consultancy Services on various legal aspects of the Insurance Industry
|
