Criteria for Declaring a Public Financial Institution u/s 4A of the Companies Act, 1956 Explained.
The circular outlines the criteria for declaring a financial institution as a Public Financial Institution (PFI) under Section 4A of the Companies Act, 1956. To qualify, the entity must be established under a special Act or the Companies Act, primarily engage in industrial or infrastructural financing, and have been operational for at least three years with over 50% of its income from such activities. It must have a net worth of at least Rs. 1000 crore and be registered as an Infrastructure Finance Company or Housing Finance Company, with necessary approvals from regulatory bodies. Exceptions apply to Central and State Public Sector Undertakings.
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