Jayjay asked 1 year ago
  1. Will ‘loan from own shareholders taken by a private limited nbfc’  come under the definition of Public Fund as per RBI Circular dated 01.09.2016 vide chapter II point 3 (xxv)., AS deposit/loan from own shareholders is not regarded “Public Deposit”.


  1. Will ‘Overdraft against own Bank FDR taken by a private limited nbfc’ come under the definition of Public Fund/Bank finance as per RBI Circular dated 01.09.2016, whereas as per RBI circular Bank FDR is not considered as Financial Assets as per Rbi circular RBI/2011-12/446 DNBS (PD)CC.No.259 /03.02.59/2011-12 dated March 15, 2012 , As this Overdraft  is only against NBFC’s own fund. If there is no FDR, there will be no overdraft, means no real Bank Finance.


  1. Will loan from ‘Holding private limited NBFC’ to its ‘associate private limited NBFC’ and vice versa come under ‘inter corporate deposit’ under Public Fund as per RBI Circular dated 01.09.2016, as in real sense there is no outside Public Fund is involved.
1 Answers
RaviRavi Staff answered 1 year ago

Hello Jay
I have developed my knowledge and skills limited to academic excellence. I take practical exposure to the extent relevant for academic excellence. Going indepth in NBFC is beyond by expertise because of time constraint. But still..
I went through definition if public funds,as per latest amendment, as given below
(xxiii) “Public funds” includes funds raised either directly or indirectly through public deposits, inter-corporate deposits, bank finance and all funds received from outside sources such as funds raised by issue of Commercial Papers, debentures etc. but excludes funds raised by issue of instruments compulsorily convertible into equity shares within a period not exceeding 10 years from the date of issue.
from this i feel

  1. Loan from shareholders should not be covered in public funds as they emphasis on bank finance as public fund.
  2. Loan from bank in the form of OD should be public fund whether or not secured and against which security.
  3. Inter corporate deposit should be part of public fund irrespective from whom we are taking it.

Above interpretation is on the basis of critical reading and understanding of above definition. Please corroborate it

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