Non-Banking Finance Companies (NBFC) which obtain registration, park their funds in fixed deposits with banks and do not commence business have come under the central bank’s lens.
Investments in fixed deposits cannot be treated as financial as- sets. Receipt of interest income on fixed deposits with banks cannot be treated as income from financial assets, the cents bank said in a notification on March 15, 2012. Besides, bans deposits constitute near money and can be used only for temporary parking of idle funds, till commencement of NBFI business. NBFCs can commence business or carry on. the business of a non-banking financial institution only after obtaining a certificate of registration (CoR) from the RBI. They should have E net owned fund of Rs 25 lakh, which was increased to Rs. 20( lakh with effect from April 21, 1999.