Ø Section 45 (2) of BR Act, 1949 authorises Central Govt. to

when PCS reach a paid-up share-capital and reserve of Rs. 1

pass moratorium for UCBs. Under Section 45 (2) UCBs are

lakh and above and automatically converted into UCB.

required to adhere to the moratorium, but other provisions of

same section (sub section 4-15) are extended to UCBs. Suitable

Ø To amend the third schedule applicable to UCBs so that one

amendment should be made in BR Act to extend these provisions

or similar format for presenting balance sheet, profit & loss account

to UCBs also.

with that of BR Act or as applicable to commercial banks.

Ø The committee is not in favour of PCS carrying on banking

Ø  Amendment of co-operative societies Act, and multi-State

business and its automatic conversion into UCB, therefore, it

co-operative Act have to be carried out by respective States but

recommends that clause (a) of the proviso to section 49 A should

in consultation with the Reserve Bank of India.

be deleted from the Act so that PCS are stopped from accepting

deposits withdrawable by cheque. Such a provision is desirable

********************

NEWS FLASH

50. NON-BANKING FINANCIAL COMPANIES(NBFCS)

49. CREDIT DELIVERY MECHANISMS

Of 37,212 NBFCs which applied for registration, the Bank has

(g) Implementation of Swarnjayanti Gram Swarozgar

so far approved registration to 702 deposit taking companies

Yojana (SGSY)

permitting them to accept public deposits and aslo granted

registration to 9,857 NBFCs in the category of non-public

The year 1999 -2000 was the first year of implementation of

deposit taking companes.Since the expiry of time period for

SGSY. The scheme was launched with effect from April 1,

attaining the minimum stipulated level of Net Owned Fund

1999 and detailed guidelines were issued to banks by the

Reserve Bank of speedy implementation of the scheme. Public (NOF) of Rs 25 lakhs on January 10, 2000, Bank has

received applications from as many as 8,027 NBFCs

sector banks were also advised to organise special

reporting attainment of NOF of Rs 25 lakhs and 2,207 NBFCs

workshops to discuss the scheme and its implementation.

for extension of time.

(h) Self help groups (SHGs)

The Bank is at present engaged in processing applications of

such NBFCs as had the NOF below Rs 25 lakhs as on

The Finance Minister made an announcement in the Budget

January 10, 2000.It has already been announced that the

Speech about the special emphasis laid on the promotion of

micro enterprises in rural areas set up by vulnerable sectors  extension of time would be considered on merits of each

NBFC.

including women, scheduled castes, scheduled tribes and

other backward classes. In 1999-2000, the credit-linkage as

(a) Regulatory Norms for NBFCs

also loan disbursements by banks to SHGs were more than

twice the cumulative performance up to the end of the previous

Reserve Bank is working out the modalities in consultation with

year under the NABARD programme. A coverage of

additional one lakh SHGs by NABARD and SIDBI during the  associations of NBFCs, for formation of a Self Regulatory

Organisation of NBFCs.

year 2000-01 has been announced. Banks are advised to

provide maximum support to SHGs as per RBI circulardated

Draft guidelines for asset liability management and formats of

March 3, 2000.

seperate balance sheet for NBFCs have been circulated

among the members of Informal Advisory Group on NBFCs

Source: Monetary and Credit Policy; October 10, 2000;

for the views of industry. Further steps would be taken to put in

RBI Mumbai

place the disclosure norms and guidelines for risk

management for NBFCs .

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