Non-Banking Financial Company - Muds Management

1. PRESENTATION ON Non-Banking Financial Companies Privileged & Confidential MUDS MANAGEMENT PRIVATE LIMITED

2. WHAT IS A NON-BANKING FINANCIAL COMPANY (NBFC) A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, engaged in the business of loans and advances, acquisition of shares/ stocks/ bonds/ debentures/ securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property. A non-banking institution which is a company and has principal business of receiving deposits under any scheme or arrangement in one lump sum or in instalments by way of contributions or in any other manner, is also a non-banking financial company (Residuary non-banking company). MUDS MANAGEMENT PRIVATE LIMITED

3. NBFCs and Banks Differentiation • NBFCs cannot accept demand deposits. • NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself. • Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available for NBFC depositors unlike in case of banks. MUDS MANAGEMENT PRIVATE LIMITED

4. REGISTRATION WITH RBI • In terms of Section 45-IA of the RBI Act, 1934, no Non-banking Financial company can commence or carry on business of a non-banking financial institution without: • Obtaining a Certificate of Registration from the Reserve Bank of India; and • Without having a Net Owned Funds of Rs. Two Crore. NBFCs Type I & Type II a) Type I - NBFC-ND not accepting public funds1/ not intending to accept public funds in the future and not having customer interface2/ not intending to have customer interface in the future. b) Type II - NBFC-ND accepting public funds/ intending to accept public funds in the future and/or having customer interface/intending to have customer interface in the future. MUDS MANAGEMENT PRIVATE LIMITED

5. PROCEDURE FOR REGISTRATION OF NBFC MUDS MANAGEMENT PRIVATE LIMITED

6. DOCUMENTS REQUIRED TO BE FILED WITH APPLICATION FOR TYPE-I NBFC-ND Certified copies of Certificate of Incorporation and Certificate of Commencement of Business in case of public limited companies. Certified copies of extract of only the main object clause in the MOA relating to the financial business. Board resolution stating that: the company is not carrying on any NBFC activity/stopped NBFC activity and will not carry on/commence the same before getting registration from RBI the UIBs in the group where the director holds substantial interest or otherwise has not accepted any public deposit in the past /does not hold any public deposit as on the date and will not accept the same in future the company has formulated “Fair Practices Code” as per RBI Guidelines the company has not accepted public funds in the past/does not hold any public fund as on the date and will not accept the same in the future without the approval of Reserve Bank of India the company does not have any customer interface as on date and will not have any customer interface in the future without the approval of Reserve Bank of India. 4. Copy of Fixed Deposit receipt & bankers certificate of no lien indicating balances in support of NOF MUDS MANAGEMENT PRIVATE LIMITED

7. DOCUMENTS REQUIRED TO BE FILED WITH APPLICATION 5. For companies already in existence, the Audited balance sheet and Profit & Loss account along with directors & auditors report or for the entire period the company is in existence, or for last three years , whichever is less, should be submitted 6. Banker’s report in respect of applicant company, its group/subsidiary/associate/holding company/related parties, directors of the applicant company having substantial interest in other companies The Banker’s report should be about the dealings of these entities with these bankers as a depositing entity or a borrowing entity. Note: Please provide bankers report from all the bankers of each of these entities and provide the report for all the entities. The details of deposits and loans balances as on the date of application and the conduct of the account should be specified. MUDS MANAGEMENT PRIVATE LIMITED

8. DOCUMENTS REQUIRED TO BE FILED WITH APPLICATION FOR TYPE-II NBFC-ND Certified copies of Certificate of Incorporation and Certificate of Commencement of Business in case of public limited companies. Certified copies of extract of only the main object clause in the MOA relating to the financial business. Board resolution stating that: the company is not carrying on any NBFC activity/stopped NBFC activity and will not carry on/commence the same before getting registration from RBI the company has not accepted any public deposit, in the past (specify period)/does not hold any public deposit as on the date and will not accept the same in future without the prior approval of Reserve Bank of India the UIBs in the group where the director holds substantial interest or otherwise has not accepted any public deposit in the past /does not hold any public deposit as on the date and will not accept the same in future the company has formulated “Fair Practices Code” as per RBI. Copy of Fixed Deposit receipt & bankers certificate of no lien indicating balances in support of NOF. For companies already in existence, the Audited balance sheet and Profit & Loss account along with directors & auditors report or for the entire period the company is in existence, or for last three years, whichever is less, should be submitted MUDS MANAGEMENT PRIVATE LIMITED

9. DOCUMENTS REQUIRED TO BE FILED WITH APPLICATION FOR TYPE-II NBFC-ND 6. Copy of the certificate of highest educational and professional qualification in respect of all the directors 7. Copy of experience certificate, if any, in the Financial Services Sector (including Banking Sector) in respect of all the directors. 8. Banker’s report in respect of applicant company, its group/subsidiary/associate/holding company/related parties, directors of the applicant company having substantial interest in other companies The Banker’s report should be about the dealings of these entities with these bankers as a depositing entity or a borrowing entity. NOTE: Please provide bankers report from all the bankers of each of these entities and provide the report for all the entities. The details of deposits and loans balances as on the date of application and the conduct of the account should be specified. MUDS MANAGEMENT PRIVATE LIMITED

10. TYPES OF NBFCs MUDS MANAGEMENT PRIVATE LIMITED

11. PROCESS 3. Application + necessary documents 4. Reserve Bank of India (Regional Office) 5. Reserve Bank of India (Central Office) Filing Screening Approve Send for Resubmission 2. Minimum Net Owned Fund of Rs. 2 Crore Certificate of Registration Removal of Defects 1. Incorporation of Company MUDS MANAGEMENT PRIVATE LIMITED

12. Ceiling on Acceptance of Public Deposits MUDS MANAGEMENT PRIVATE LIMITED

13. Important regulations relating to acceptance of deposits • The NBFCs are allowed to accept/renew public deposits for a minimum period of 12 months and maximum period of 60 months. They cannot accept deposits repayable on demand. • NBFCs cannot offer interest rates higher than the ceiling rate prescribed by RBI from time to time. The present ceiling is 12.5 per cent per annum. The interest may be paid or compounded at rests not shorter than monthly rests. • NBFCs cannot offer gifts/incentives or any other additional benefit to the depositors. • NBFCs (except certain AFCs) should have minimum investment grade credit rating. • The deposits with NBFCs are not insured. • The repayment of deposits by NBFCs is not guaranteed by RBI. • Certain mandatory disclosures are to be made about the company in the Application Form issued by the company soliciting deposits. • Overdue interest is payable to the depositors in case the company has delayed the repayment of matured deposits, and such interest is payable from the date of receipt of such claim by the company or the date of maturity of the deposit whichever is later, till the date of actual payment. If the depositor has lodged his claim after the date of maturity, the company would be liable to pay interest for the period from the date of claim till the date of repayment. For the period between the date of maturity and the date of claim it is the discretion of the company to pay interest. MUDS MANAGEMENT PRIVATE LIMITED

14. Owned Fund and Net-owned Fund MUDS MANAGEMENT PRIVATE LIMITED

15. RBI Compliances NBFCs accepting public deposits • Audited balance sheet and profit and loss account along with Director’s Report and Auditor’s Report; • Statutory Quarterly Return on deposits; • Certificate from the Auditors that the company is in a position to repay the deposits; • Quarterly Return on prudential norms; • Quarterly Return on liquid assets; • Annual return of critical parameters by a rejected company holding public deposits; • Half-yearly Returns by companies having public deposits of Rs. 20 crore and above or asset size of Rs. 100 crore or more; • Monthly return on exposure to capital market by deposit taking NBFC with total assets of Rs 100 crore and above; • A copy of the Credit Rating obtained once a year; • Certificate from Statutory Auditors to the effect that the NBFC continues to undertake the business of NBFI requiring holding of COR under Section 45-IA of the RBI Act; • To furnish the information in respect of any change in the composition of Board of Directors, address of the company and its Directors, etc. MUDS MANAGEMENT PRIVATE LIMITED

16. RBI Compliances (Contd..) NBFCs not accepting public deposits having assets of Rs. 100 crore and above • Quarterly statement of capital funds, risk weighted assets, risk asset ratio etc.; • Monthly Return on Important Financial Parameters of the company; • Asset- Liability Management returns; • Monthly Statement of short term dynamic liquidity; • Half Yearly Statement of structural liquidity; • Half yearly Statement of Interest Rate Sensitivity; • Passing of a board resolution to the effect that they have neither accepted public deposit nor would accept any public deposit during the year. • Certificate from Statutory Auditors to the effect that the NBFC continues to undertake the business of NBFI requiring holding of COR under Section 45-IA of the RBI Act. • To furnish the information in respect of any change in the composition of Board of Directors, address of the company and its Directors, etc. • To maintain minimum CRAR of 15% and to comply with single/group exposure norms. MUDS MANAGEMENT PRIVATE LIMITED

17. RBI Compliances (Contd..) NBFCs not accepting public deposits having assets more than Rs.50 crore and above but less than Rs 100 crore • Quarterly return on important financial parameters of the company. Basic information like name of the company, address, NOF, profit / loss during the last three years. • Passing of a board resolution to the effect that they have neither accepted public deposit nor would accept any public deposit during the year. • Certificate from Statutory Auditors to the effect that the NBFC continues to undertake the business of NBFI requiring holding of COR under Section 45-IA of the RBI Act. • To furnish the information in respect of any change in the composition of Board of Directors, address of the company and its Directors, etc. MUDS MANAGEMENT PRIVATE LIMITED

18. COMPLIANCES • LIQUID ASSET REQUIREMENT • The minimum level of liquid assets to be maintained by NBFCs is 15% of public deposits outstanding as on the last working day of the second preceding quarter. • of the 15%, NBFCs are required to invest not less than 10% in approved securities and the remaining 5% can be in unencumbered term deposits with any scheduled commercial bank. Note - NBFCs have been directed to maintain the mandated liquid asset securities in a dematerialised form MUDS MANAGEMENT PRIVATE LIMITED

19. OUR SERVICES • At initial stage: • Seeking Name Availability with the Registrar of Companies. • Drafting of Memorandum and Articles of Association of the Company. • Preparation of Affidavits and Declarations required for incorporation of the Company. • Filing of Incorporation Forms with Registrar of Companies. • Assisting in issuance of Certificate of Incorporation and Certificate of Commencement of Business from Registrar of Companies. • Application of PAN, TAN, Service Tax Registration, etc. • Opening of Bank Account. • Assisting in issuance of Share Certificates and stamping of the same. MUDS MANAGEMENT PRIVATE LIMITED

20. OUR SERVICES (Contd..) • During Registration with Reserve Bank of India: • Drafting of Resolutions, Declarations and other documents forming part of application to be submitted to Reserve Bank of India. • Preparation of Application to be submitted to Reserve Bank of India. • Liaisoning with Reserve Bank of India from time to time for issue of Certificate of Registration. • Preparation of Business Plan for the next three years, forming part of the application. MUDS MANAGEMENT PRIVATE LIMITED

21. OUR SERVICES (Contd..) • On an ongoing basis: • Drafting of Resolutions, Agendas, Minutes, Agreements, etc. • Preparation and filing of Forms required to be filed with the Registrar of Companies. • Monthly, Quarterly, Half Yearly and Annual Compliances with Reserve Bank of India. • Preparation of Statutory Registers of the Company. • Organizing Board Meetings and General Meetings of the Company. • Liaisoning with Reserve Bank of India and with Registrar of Companies from time to time. MUDS MANAGEMENT PRIVATE LIMITED

22. THIS IS JUST A TEASER. DETAILS CAN BE DISCUSSED. THANK YOU Thanks & Regards. CS Shweta Gupta Email : shweta@muds.co.in Contact: +91-9911222771, 0124-4034204 Address : A-60, Sanjay Gram, (Opposite Sector-14) Gurgaon-122001 MUDS MANAGEMENT PRIVATE LIMITED