Chapter IIIB — Non-Banking Institutions and Financial Institutions

Section 45I: Definitions

Reviewed by CA Nikhil Gupta · Last reviewed 18 September 2026

Section 45I supplies the definitions used in Chapter IIIB, which governs non-banking institutions receiving deposits and financial institutions.

Operative provisionOfficial sources mappedProvision-specific decode

Finin2min - Section 45I in 2 minutes

Legal effectSection 45I supplies the definitions used in Chapter IIIB, which governs non-banking institutions receiving deposits and financial institutions.

Operative ruleThe provision defines or frames expressions such as business of a non-banking financial institution, company, corporation, deposit, financial institution, non-banking financial company, non-banking institution and person. The definition of net owned fund is not in Section 45I; it appears in the Explanation to Section 45IA.

Connected lawClassification under Section 45I is the first step before applying registration, deposit, direction, inspection and enforcement provisions in Sections 45IA onward.

File evidenceA classification memo should map the entity's legal form and actual business to the relevant Section 45I definition and preserve the financial/business evidence used. Calculate net owned fund separately under Section 45IA and current RBI directions.

Statutory structure and clause / subsection decode

This map separates the operative limbs of this provision so thresholds, powers, conditions and exceptions are not collapsed into a single summary.

45I(a)

Business of a non-banking financial institution: ties the expression to financial-institution business and NBFC business.

45I(aa)/(b)

Company and corporation definitions establish the legal-form perimeter.

45I(bb)

Deposit is broadly inclusive but contains enumerated exclusions; classification turns on the actual receipt and statutory exclusion.

45I(c) onward

Financial institution, NBFC, non-banking institution and related expressions determine the Chapter IIIB perimeter.

Boundary with 45IA

Net owned fund is defined by the Explanation to Section 45IA, not by Section 45I.

Worked practical example

Facts. A company receives money and describes it as a customer advance. The adviser must test the statutory deposit inclusions/exclusions and the company's financial business under Section 45I; a net-owned-fund calculation belongs to Section 45IA, not the definition page.

Compliance points and common mistakes

Do not decide the issue from the heading alone. Map the facts to the operative words of Section 45I and to each relevant subsection, clause, proviso or explanation shown above.
Keep the statutory question separate from the operational overlay. Classification under Section 45I is the first step before applying registration, deposit, direction, inspection and enforcement provisions in Sections 45IA onward.
Do not convert an exception, exemption or discretionary RBI/Government power into an automatic entitlement. Record the authority, conditions and effective date.
Where the provision is historical, omitted or repealed, state that status prominently and do not present it as a current compliance obligation.

Connected provisions and instruments

NBFC Registration, Exemptions and Scale Based Regulation — current frameworkCurrent operating framework is the RBI (NBFC – Registration, Exemptions and Framework for Scale Based Regulation) Directions, 2025, amended in 2026; this existing Finin2min URL is retained.

Questions and answers

What is the purpose of Section 45I?

Definitions: Section 45I supplies the definitions used in Chapter IIIB, which governs non-banking institutions receiving deposits and financial institutions.

Which statutory limb should be checked first?

45I(a) - Business of a non-banking financial institution: ties the expression to financial-institution business and NBFC business.

What is the next legal boundary?

45I(aa)/(b) - Company and corporation definitions establish the legal-form perimeter.

What record should support the conclusion?

Section 45I file evidence: A classification memo should map the entity's legal form and actual business to the relevant Section 45I definition and preserve the financial/business evidence used. Calculate net owned fund separately under Section 45IA and current RBI directions.

Primary sources

Source control for Section 45I: use the official consolidated RBI Act for the statutory text and footnotes, then separately reconcile any post-Finance Act 2022 amendment, commencement notification or RBI instrument relevant to the event date.

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