Q:Who is an NRI?
A:An Indian citizen leaves India for the purpose of employment, business, education, stay with parents/ children, with the intention of staying abroad for an uncertain period. In such cases, he becomes a NRI the moment he leaves India, even if he has not stayed abroad for 182 days or more during the financial year.
Q:What is the meaning of Non Resident Indian?
A :non-resident Indian (NRI) is a citizen of India who holds an Indian passport and has temporarily emigrated to another country for six months or more for employment, residence, education or any other purpose.
Q:Who is a PIO?
A:Persons of Indian Origin Card (PIO Card) is a form of identification issued to a Person of Indian Origin who holds a passport in another country other than Afghanistan, Bangladesh, Bhutan, China, Nepal, Pakistan, Sri Lanka.
Q:. Define Hindu Undivided Families (HUF):
A:The Hindu Succession Act 1956 governs HUF. The HUF carries out ancestral business and possesses ancestral properties.
As per Hindu Law two schools of thought, Dayabhaga and Mitakshara govern Hindu undivided family.
In west Bengal Dayabhaga is followed and in the rest of the country Mitakshara is followed.
In Dayabhaga the father acquires absolute right and sons do not acquire any right by birth in Mitakshara a male member acquires the right by birth.
Female members are not co-parceners except in Tamil Nadu and Andhra Pradesh.
The eldest male member is called as a Karta and all other male members are called as co-parceners.
The right to manage HUF property vests in the 'Karta' of the family.
Karta is either the father or the senior most male member of the family. All other male members are called coparceners.
In the interest of the family and family business, only the Karta can create a charge over the ancestral property. However, he cannot make a contract, which binds the other member personally. Other members are responsible to the extent of their share in the ancestral property.
HUF is not dissolved In the event of death of one of the members of the joint Hindu family. It differs from the partnership firm as on the death of one of the partners, the firm is dissolved. On the death of karta the senior most co-parcener becomes karta.
A coparcener continues to be a member of HUF, even after his migration outside India and acquiring status of NRI or taking citizenship of another country.
If the Karta himself migrates, an alternative Karta of the HUF is appointed by the HUF with consent from all coparceners.
Q: Discuss about Accounts of Sole Proprietary Concerns:
A:Banks do not open savings bank account in the name of a proprietorship firm but open current account in the name of the sole proprietary concerns.
Accounts in the name of a sole proprietary concern are treated like individual accounts.
The account can be operated either by the proprietor himself or by a person duly authorised to operate the account on his behalf.
Q: WHAT DO YOU UNDERSTAND BY TERM PARTNERSHIP FIRM:
A:Partnership” is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Persons who have entered into partnership with one another are called individually “partners” and collectively a “firm”, and the name under which their business is carried on is called the “firm name”.
Q: What do mean by word Limited Liability Partnership (LLP) :
A:A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore exhibits elements of partnerships and corporations. In an LLP, one partner is not responsible or liable for another partner's misconduct or negligence.
Q:What are Brown Label ATMs
A:'Brown label' ATM are those Automated Teller Machines where hardware and the lease of the ATM machine is owned by a service provider, but cash management and connectivity to banking networks is provided by a sponsor bank whose brand is used on the ATM.
The `brown label' has come up as an alternative between bank-owned ATMs.
Q. What is a Non-Banking Financial Company?
A :Non-Banking Financial Company (NBFC) is a company a) registered under the Companies Act, 1956, b) its principal business is lending, investments in various types of shares/stocks/bonds/debentures/securities, leasing, hire-purchase, insurance business, chit business, and c) its principal business is receiving deposits under any scheme or arrangement in one lump sum or in instalments. However, a Non-Banking Financial Company does not include any institution whose principal business is agricultural activity, industrial activity, trading activity or sale/purchase/construction of immovable property. (Section 45 I (c) of the RBI Act, 1934) . One key aspect to be kept in view is that the financial activity of loans/advances as stated in 45 I ( c) , should be for activity other than its own. In the absence of this provision, all companies would have been NBFCs.
Q:. What are systemically important NBFCs?
A:NBFCs whose asset size is of Rs.100 cr or more as per last audited balance sheet are considered as systemically important NBFCs. The rationale for such classification is that the activities of such NBFCs will have a bearing on the financial stability in our country.
Q:. Does the Reserve Bank regulate all financial companies?
A:No. Some financial businesses have specific regulators established by law to regulate and supervise them, such as, IRDA for insurance companies, Securities Exchange Board of India (SEBI) for Merchant Banking Companies, Venture Capital Companies, Stock Broking companies and mutual funds, National Housing Bank (NHB) for housing finance companies, Department of Companies Affairs (DCA) for Nidhi companies and State Governments for Chit Fund Companies. Companies which do financial business but are regulated by other regulators, are given specific exemption by the Reserve Bank from its regulatory requirements, such as, registration, maintenance of liquid assets, statutory reserves, etc. The Chart below gives the nature of activities and the concerned regulators.
Q:. What kind of specific financial companies are regulated by RBI?
A:The Reserve Bank of India regulates and supervises Non-Banking Financial Companies which are into the business of (i) lending (ii) acquisition of shares, stocks, bonds, etc., or (iii) financial leasing or hire purchase. The Reserve Bank also regulates companies whose principal business is to accept deposits. (Section 45I (c) of the RBI Act, 1934)
Q:. What are the powers of the Reserve Bank with regard to 'Non-Bank Financial Companies’, that is, companies that meet the 50-50 Principal Business Criteria?
A:The Reserve Bank has been given the powers under the RBI Act 1934 to register, lay down policy, issue directions, inspect, regulate, supervise and exercise surveillance over NBFCs that meet the 50-50 criteria of principal business. The Reserve Bank can penalize NBFCs for violating the provisions of the RBI Act or the directions or orders issued by RBI under RBI Act. The penal action can also result in RBI cancelling the Certificate of Registration issued to the NBFC, or prohibiting them from accepting deposits and alienating their assets or filing a winding up petition.
A:An Indian citizen leaves India for the purpose of employment, business, education, stay with parents/ children, with the intention of staying abroad for an uncertain period. In such cases, he becomes a NRI the moment he leaves India, even if he has not stayed abroad for 182 days or more during the financial year.
Q:What is the meaning of Non Resident Indian?
A :non-resident Indian (NRI) is a citizen of India who holds an Indian passport and has temporarily emigrated to another country for six months or more for employment, residence, education or any other purpose.
Q:Who is a PIO?
A:Persons of Indian Origin Card (PIO Card) is a form of identification issued to a Person of Indian Origin who holds a passport in another country other than Afghanistan, Bangladesh, Bhutan, China, Nepal, Pakistan, Sri Lanka.
Q:. Define Hindu Undivided Families (HUF):
A:The Hindu Succession Act 1956 governs HUF. The HUF carries out ancestral business and possesses ancestral properties.
As per Hindu Law two schools of thought, Dayabhaga and Mitakshara govern Hindu undivided family.
In west Bengal Dayabhaga is followed and in the rest of the country Mitakshara is followed.
In Dayabhaga the father acquires absolute right and sons do not acquire any right by birth in Mitakshara a male member acquires the right by birth.
Female members are not co-parceners except in Tamil Nadu and Andhra Pradesh.
The eldest male member is called as a Karta and all other male members are called as co-parceners.
The right to manage HUF property vests in the 'Karta' of the family.
Karta is either the father or the senior most male member of the family. All other male members are called coparceners.
In the interest of the family and family business, only the Karta can create a charge over the ancestral property. However, he cannot make a contract, which binds the other member personally. Other members are responsible to the extent of their share in the ancestral property.
HUF is not dissolved In the event of death of one of the members of the joint Hindu family. It differs from the partnership firm as on the death of one of the partners, the firm is dissolved. On the death of karta the senior most co-parcener becomes karta.
A coparcener continues to be a member of HUF, even after his migration outside India and acquiring status of NRI or taking citizenship of another country.
If the Karta himself migrates, an alternative Karta of the HUF is appointed by the HUF with consent from all coparceners.
Q: Discuss about Accounts of Sole Proprietary Concerns:
A:Banks do not open savings bank account in the name of a proprietorship firm but open current account in the name of the sole proprietary concerns.
Accounts in the name of a sole proprietary concern are treated like individual accounts.
The account can be operated either by the proprietor himself or by a person duly authorised to operate the account on his behalf.
Q: WHAT DO YOU UNDERSTAND BY TERM PARTNERSHIP FIRM:
A:Partnership” is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Persons who have entered into partnership with one another are called individually “partners” and collectively a “firm”, and the name under which their business is carried on is called the “firm name”.
Q: What do mean by word Limited Liability Partnership (LLP) :
A:A limited liability partnership (LLP) is a partnership in which some or all partners (depending on the jurisdiction) have limited liabilities. It therefore exhibits elements of partnerships and corporations. In an LLP, one partner is not responsible or liable for another partner's misconduct or negligence.
Q:What are Brown Label ATMs
A:'Brown label' ATM are those Automated Teller Machines where hardware and the lease of the ATM machine is owned by a service provider, but cash management and connectivity to banking networks is provided by a sponsor bank whose brand is used on the ATM.
The `brown label' has come up as an alternative between bank-owned ATMs.
Q. What is a Non-Banking Financial Company?
A :Non-Banking Financial Company (NBFC) is a company a) registered under the Companies Act, 1956, b) its principal business is lending, investments in various types of shares/stocks/bonds/debentures/securities, leasing, hire-purchase, insurance business, chit business, and c) its principal business is receiving deposits under any scheme or arrangement in one lump sum or in instalments. However, a Non-Banking Financial Company does not include any institution whose principal business is agricultural activity, industrial activity, trading activity or sale/purchase/construction of immovable property. (Section 45 I (c) of the RBI Act, 1934) . One key aspect to be kept in view is that the financial activity of loans/advances as stated in 45 I ( c) , should be for activity other than its own. In the absence of this provision, all companies would have been NBFCs.
Q:. What are systemically important NBFCs?
A:NBFCs whose asset size is of Rs.100 cr or more as per last audited balance sheet are considered as systemically important NBFCs. The rationale for such classification is that the activities of such NBFCs will have a bearing on the financial stability in our country.
Q:. Does the Reserve Bank regulate all financial companies?
A:No. Some financial businesses have specific regulators established by law to regulate and supervise them, such as, IRDA for insurance companies, Securities Exchange Board of India (SEBI) for Merchant Banking Companies, Venture Capital Companies, Stock Broking companies and mutual funds, National Housing Bank (NHB) for housing finance companies, Department of Companies Affairs (DCA) for Nidhi companies and State Governments for Chit Fund Companies. Companies which do financial business but are regulated by other regulators, are given specific exemption by the Reserve Bank from its regulatory requirements, such as, registration, maintenance of liquid assets, statutory reserves, etc. The Chart below gives the nature of activities and the concerned regulators.
Q:. What kind of specific financial companies are regulated by RBI?
A:The Reserve Bank of India regulates and supervises Non-Banking Financial Companies which are into the business of (i) lending (ii) acquisition of shares, stocks, bonds, etc., or (iii) financial leasing or hire purchase. The Reserve Bank also regulates companies whose principal business is to accept deposits. (Section 45I (c) of the RBI Act, 1934)
Q:. What are the powers of the Reserve Bank with regard to 'Non-Bank Financial Companies’, that is, companies that meet the 50-50 Principal Business Criteria?
A:The Reserve Bank has been given the powers under the RBI Act 1934 to register, lay down policy, issue directions, inspect, regulate, supervise and exercise surveillance over NBFCs that meet the 50-50 criteria of principal business. The Reserve Bank can penalize NBFCs for violating the provisions of the RBI Act or the directions or orders issued by RBI under RBI Act. The penal action can also result in RBI cancelling the Certificate of Registration issued to the NBFC, or prohibiting them from accepting deposits and alienating their assets or filing a winding up petition.
Anil Aggarwal
Owner & Manager at Anil Aggarwal Coaching
(A proprietorship concern for IBPS exam guidance and Bank Interview preparation)
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E-mail ID: anilakshita@yahoo.co.in
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