Transfer to General reserve by NBFC

[BIJAL SALOT]

Dear All,

Whether as per Section 45IC of the Reserve Bank of India Act ,1934 "Every  NBFC shall create a reserve fund & transfer therein a sum not less than 20% of its net profit every year as disclosed in the profit & loss account & before any dividend is declared."

Does this means that every NBFC irrespective of whether it has paid dividend or not has to transfer to general reserve 20% of its net profit every year? or
It means NBFC which has declared dividend require to transfer 20% of its net profit to general reserve before paying any dividend?

Views of all members are invited.

Thanks & Regards,

Bijal  

[bijals...@gmail.com]

[CS. JAYANT SUTHAR]

whether dividend declare or not u hv to transfer

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Jayant Suthar

M.Com., ACS, CWA (Int.)

[BIJAL SALOT]

Dear Sir,

It is applicable to all NBFC or only NBFC accepting Public Deposit.

Thanks & Regards,

Bijal

[CS. JAYANT SUTHAR]

for all