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Trunal Sorte (Accounts Officer)     20 September 2011



We are section 25 company (NGO). We are giving scholarship to students. The 50% of scholarship is treated as loan to the student @ 6% interest p.a. and another 50% is non-recoverable.

In the above scenario, I would like to know:

1. Is there any provision under NBFC which attracts the rate of interest charged on such loan?

2. Is there any provision under RBI Act, 1934 related to this query?

3. Any other Act applies to us and which section of such Act?

Please anybody can answer this query, it will be a greate help.

Thank you.




 2 Replies

rajguptacs (professional)     20 September 2011



     Following companies are exempted from Registration under

    Section 45-IA of the Reserve Bank of India Act, 1934


1.     Housing finance companies

2.     Merchant Banking Companies

3.     Micro Finance Companies

(i)            engaged in micro financing activities, providing credit not exceeding Rs. 50,000 for a business enterprise and Rs. 1,25,000 for meeting the cost of a dwelling unit to any poor person for enabling him to raise his level of income and standard of living; and

(ii)          licensed under section 25 of the Companies Act, 1956; and

(iii)         not accepting public deposits as defined in paragraph 2(1) (xiii) of Notification No. 118/DG(SPT)-98 dated January 31, 1998 ( merchant banking companies)


4.     Government Companies

5.     Venture Capital Fund Companies

6.     Insurance/Stock Exchange/Stock Broker/Sub-broker

7.     Nidhi Companies


Rajesh Gupta

Sachin Agarwal (Propritor)     22 September 2011

Dear Trunal Sorte, 

                                       Generally, NGO which are registered under section 25 are not required to registration in RBI. but in your situation there is one problem that whether as per your registration of NGO under section 25 allowed you to do give loan or not. ? 

Please write me email for more detail disccussion on this matter. my email id is sachinagarwalcallb@gmail.com 



Sachin Agarwal CA LLB 

+91 9910822027

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