Page 299 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
April 08, 1999, and directions issued by auditor shall examine whether the company has obtained a Certificate
of Registration (COR) from the Bank.
Net Owned Fund: Whether the non-banking financial company is meeting the required net owned fund
requirement as laid down in Master Direction - Non-Banking Financial Company – Non-Systemically
Important Non-Deposit taking Company (Reserve Bank) Directions, 2016 and Master Direction - Non-
Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking
Company (Reserve Bank) Directions, 2016.

E.g., Systematically Important if Asset Size above 500 Crore
Non-Systematically Important & Non-Deposit taking NBFC (ND-NBFC)
Systematically Important & Not Deposit taking NBFC (SI-ND-NBFC)
Systematically Important & Deposit taking NBFC (SI-D-NBFC)

Certificate from Statutory Auditor:
Note: Every non-banking financial company shall submit a Certificate from its Statutory Auditor that it is
engaged in the business of non-banking financial institution requiring it to hold a Certificate of Registration
under Section 45-IA of the RBI Act and is eligible to hold it. A certificate from the Statutory Auditor in this
regard with reference to the position of the company as at end of the financial year ended March 31 may be
submitted to the Regional Office of the Department of Non-Banking Supervision under whose jurisdiction the
nonbanking financial company is registered, within one month from the date of finalization of the balance
sheet and in any case not later than December 30 of that year. The format of Statutory Auditor's Certificate
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(SAC) to be submitted by NBFCs has been issued by RBI.
2.NBFCs holding Deposits:
In the case of a non-banking financial companies accepting/holding public deposits. Apart from the matters
enumerated in (A) above, the auditor shall include a statement on the following matters, namely-
Rating: In respect of non-banking financial companies referred to in clause (iii) above, whether the credit
rating, for each of the fixed deposits schemes that has been assigned by one of the Credit Rating Agencies listed
in Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016 is in
force; and
MIGR: Whether the non-banking financial company is accepting "public deposit” without minimum
investment grade credit rating from an approved credit rating agency as per the provisions of Non-Banking
Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016;
Limit as per Credit Rating Agency: whether the aggregate amount of deposits outstanding as at any point
during the year has exceeded the limit specified by the such Credit Rating Agency;
Deposits within the limit?
Whether the public deposits accepted by the company together with other borrowings indicated below viz.
from public by issue of unsecured non-convertible debentures/bonds; from its shareholders (if it is a public
limited company); and which are not excluded from the definition of 'public deposit' in the Non-Banking
Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016, are within the limits
admissible to the company as per the provisions of the Non-Banking Financial Companies Acceptance of
Public Deposits (Reserve Bank) Directions, 2016;

Regularization of Deposits: Whether the public deposits held by the company in excess of the quantum of
such deposits permissible to it under the provisions of Non-Banking Financial Companies Acceptance of
Public Deposits (Reserve Bank) Directions, 2016 are regularized in the manner provided in the said Directions;
Computation of CAR: Whether the capital adequacy ratio as disclosed in the return submitted to the Bank in
terms of the Non-Banking Financial Company-Systemically Important Non-Deposit taking Company and
Deposit taking Company (Reserve Bank) Directions, 2016 has been correctly determined and whether such
ratio is in compliance with the minimum CRAR prescribed therein;

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