What is a Public Financial Institution?
SUB-SECTION (2) of Section 4A of the Companies Act empowers the Central Government, subject to the provision of sub-section (1) of section 4A of the Act, to notify in the official Gazette such other institution as it may think fit to be Public Financial Institutions (PFI).
The Government has now decided that a Financial Institution applying for declaration as PFI shall fulfil the following criteria:-
(a) A company or corporation should be established under a special Act or the Companies Act, 1956 being a Central Act;
(b) Main business of the company should be industrial/infrastructural financing;
(c) The company must be in existence for at least 3 years and its financial statements should show that its income from industrial/infrastructural financing activities exceeds 50% of its total income.
(d) The net-worth of the company should be minimum of Rs. 1000 (Rs. One Thousand) crore.
(e) Company is registered as a Infrastructure Finance Company (IFC) with RBI or as a Housing Finance Company (HFC) with National Housing Bank;
(f) NOC from RBI/NHB, in the case of IFC/HFC, with regard to supervisory concerns, if any, must be obtained and enclosed with the application.
(g) Such IFCs/HFCs, after being declared as PFIs are required to disclose in their audited Financial Statements that they are complying with the directions and conditions laid down by the Ministry.
MCA F. No. -CL V: Dated; May 21, 2012