Section 45-IB of RBI Act : Section 45-Ib: Maintenance Of Percentage Of Assets
RBI Act
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Explanation using Example
Imagine a non-banking financial company (NBFC) named "QuickLoans Pvt. Ltd." that specializes in providing personal loans to consumers. As per Section 45-IB of the Reserve Bank of India Act, 1934, QuickLoans is required to maintain a certain percentage of its deposits in unencumbered approved securities.
At the close of business on June 30th, QuickLoans reviews its financials and finds that its deposits outstanding are INR 100 million. According to the RBI Act, it must therefore invest at least 5% of this amount, which is INR 5 million, in approved securities. However, QuickLoans only...
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