Page 303 - CA Final PARAM Digital Book.

(Violation of Public Deposit Direction)
• Whether the company has violated any restriction on acceptance of public
deposit as provided in Non-Banking Financial Companies Acceptance of Public
Deposits (Reserve Bank) Directions, 2016;
(New Branches)
• Whether, in the case of opening of new branches or offices to collect deposits or
in the case of closure of existing branches/ offices or in the case of appointment
of agent, the company has complied with the requirements contained in the Non-
Banking Financial Companies Acceptance of Public Deposits (Reserve Bank)
Directions,2016.
NBFCs Not Accepting Deposits
• (C) In the case of a non-banking financial company not accepting public deposits Apart
from the aspects enumerated in (A) above, the auditor shall include a statement on the
following matters, namely: -
(Board Resolution)
• Whether the Board of Directors has passed a resolution for non- acceptance of
any public deposits;
(Acceptance of Deposit)
• Whether the company has accepted any public deposits during the relevant
period/year;
(Classification)
• whether the non-banking financial company has been correctly classified as NBFC
Micro Finance Institutions (MFI) as defined in the Non-Banking Financial Company
– Non-Systemically Important Non-Deposit taking Company (Reserve Bank)
Directions, 2016 and Non-Banking Financial Company - Systemically Important
Non-Deposit taking Company and Deposit taking Company (Reserve Bank)
Directions, 2016.
(Systematically Important NBFC)
• In respect of Systemically Important Non-deposit taking NBFCs as defined in Non-
Banking Financial Company - Systemically Important Non-Deposit taking Company
and Deposit taking Company (Reserve Bank) Directions, 2016:
o Whether the capital adequacy ratio as disclosed in the return submitted
to the Bank in form NBS- 7, has been correctly arrived at and whether
such ratio is in compliance with the minimum CRAR prescribed by the
Bank;
o Whether the company has furnished to the Bank the annual statement of
capital funds, risk assets/exposures and risk asset ratio (NBS-7) within the
stipulated period.

(Prudential Norms)
• Whether the company has complied with the prudential norms relating to income
recognition, accounting standards, asset classification and provisioning for bad
and doubtful debts as applicable to it in terms of Non-Banking Financial Company
– No Systemically Important Non-Deposit taking Company (Reserve Bank)
Directions, 2016 and Non-Banking Financial Company - Systemically Important
Non-Deposit taking Company and Deposit taking Company (Reserve Bank)
Directions, 2016;

NBFC not required COR
• (D) In the case of a company engaged in the business of non-banking financial institution
not required to hold CoR subject to certain conditions Apart from the matters enumerated
in (A) (I) above where a company has obtained a specific advice from the Bank that it is
not required to hold CoR from the Bank, the auditor shall include a statement that the
company is complying with the conditions stipulated as advised by the Bank.
Reasons
• Reasons to be stated for unfavourable or qualified statements Where, in the
auditor’s report, the statement regarding any of the items referred to in
paragraph 3 above is unfavourable or qualified, the auditor’s report shall also
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