1. What is Net Owned Funds (NOF)?

Net Owned Funds (NOF) represents the net worth of a Non-Banking Financial Company (NBFC) as per RBI guidelines. It is calculated as the sum of paid-up capital and free reserves, minus intangible assets and accumulated losses.

2. How Does the Calculator Work?

The calculator uses the NOF formula:

Where:

• Paid-up Capital — Capital actually paid by shareholders
• Free Reserves — Reserves available for distribution as dividends
• Intangibles — Non-physical assets like goodwill, patents, trademarks
• Losses — Accumulated losses carried forward

Explanation: This formula calculates the tangible net worth of an NBFC, which is crucial for regulatory compliance and financial health assessment.

3. Importance of NOF Calculation

Details: NOF is a key regulatory requirement for NBFCs under RBI guidelines. It determines the company's capital adequacy, borrowing limits, and compliance with various regulatory thresholds. Maintaining adequate NOF is essential for NBFC licensing and operations.

4. Using the Calculator

Tips: Enter all amounts in Indian Rupees (INR). Ensure values are accurate and reflect the current financial position. All inputs must be non-negative numbers representing the respective financial components.

5. Frequently Asked Questions (FAQ)

Q1: What is the minimum NOF requirement for NBFCs?
A: As per RBI guidelines, the minimum NOF requirement for NBFC registration is ₹2 crore for non-deposit taking NBFCs and higher amounts for specific categories.

Q2: How often should NOF be calculated?
A: NBFCs should calculate NOF regularly, typically as part of quarterly and annual financial reporting to ensure ongoing compliance with RBI regulations.

Q3: What constitutes 'Free Reserves'?
A: Free reserves include general reserve, capital reserve, share premium, and other reserves that are not earmarked for specific purposes and are available for distribution.

Q4: Are there any exemptions to NOF requirements?
A: Certain categories of NBFCs may have different NOF requirements based on their business activities and scale of operations as specified by RBI.

Q5: How does NOF affect NBFC operations?
A: NOF determines the company's borrowing capacity, investment limits, and ability to undertake various financial activities as per RBI prudential norms.