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Section 45-IA of the RBI Act, 1934 mandates a specific compliance for every Non-Banking Financial Company before it can commence non-banking financial business. What is that mandated compliance?
Answer & Solution
Correct answer: A.
1. Section 45-IA imposes the entry barrier for every NBFC.
2. The NBFC must obtain a Certificate of Registration from the RBI before commencing business.
3. It must also maintain net owned fund as the RBI specifies in the Official Gazette.
4. The Banking Ombudsman, paid-up capital threshold and chit fund registration are not Section 45-IA requirements.
_Source: ICSI CS Executive Paper 7 (Economic, Business and Commercial Laws) — Lesson 1: Reserve Bank of India Act, 1934, pp. 8-21._
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