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Net Owned Fund Calculator for NBFCs
Enter the owned funds and the group exposure from your NBFC's own balance sheet and see the net owned fund those figures give, with the allowance line and the amount deducted shown step by step, before the Reserve Bank file is drawn up.
Written by Subham Jhunjhunwala · Reviewed by CA Sundram Gupta ·
Exposure against the allowance line
Owned funds, after step 1₹0
Allowance line, 10% of owned funds₹0
Group exposure, step 2₹0
Above the line, deducted₹0
Net owned fund₹0
Updates as you type. Press Calculate for the computation in full and the assumptions behind it.
Net owned fund computation
Figures from the audited balance sheet, all at one date. Type 12,00,00,000, or 12cr, or 50L. Leave a line blank if there is none.Net owned fund as at the balance-sheet date
₹0
Owned funds, after step 1₹0capital and free reserves less the deductions
Deducted: exposure above the line₹0
The computation
The allowance line
Assumptions and flags
Figures as entered from the audited accounts; not a certificate.
After the figure
Certify the net owned fund for the Reserve Bank file
A registration application, an annual return or a lender's covenant does not take the company's own working. It asks for the same computation drawn from signed audited accounts, examined and signed by a chartered accountant.
What the file asks for
It wants a net owned fund certificate: the computation with every line traced to the audited balance sheet it came from, each group and subsidiary company named and the exposure to it listed, the allowance line applied on the basis the chartered accountant reads from the statute, the balance-sheet date, and a UDIN the reader can verify on the ICAI portal. The figure on this page is the starting point for that work, not a substitute for it.
Calculate the figure first. The button to talk to a CA appears with your result.
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What changes between this figure and the certified one
- It starts from signed audited accounts, not from a trial balance or the figures typed here.
- Which reserves are free is settled from the reserve schedule and the resolutions behind each one, not from the caption on the line.
- Every subsidiary and group company is listed from the group structure, and the shares held in and the lending to each one are traced to the ledger.
- The allowance line is applied on the basis the statute sets, read by the chartered accountant, not on a percentage typed into a worksheet.
- Where the year's accounts are not yet signed, the certificate says the figures are unaudited and to which date they are drawn.
- It carries the company's name as registered, the balance-sheet date and a UDIN the reader can check on the ICAI portal.
What the page does with your figures
How the calculator works the figures
Four steps, in the order the worksheet runs them. Each one is arithmetic on the figures you typed; the result panel repeats the assumptions beside the number so nothing is read into it that was not entered.
01
Build owned funds
Paid-up equity capital, the securities premium account and the free reserves are added. Accumulated losses, deferred revenue expenditure and other intangible assets are taken away. What is left is the owned funds the rest of the computation stands on. If the deductions exceed the capital base, owned funds are negative and the result says so.
02
Draw the allowance line
The allowance line is the percentage shown on the worksheet applied to owned funds after step 1, not to the balance-sheet total and not to the base before the deductions. On a negative base the line is nil. The percentage is editable and is treated as your reading, not as a rule the page states.
03
Measure the group exposure against it
Shares held in group and subsidiary companies and the loans, advances and other lending to them are added together and set against the line. Exposure up to the line is kept. Only the amount above it counts as the excess.
04
Deduct the excess
Net owned fund is owned funds less the excess. The result prints it in rupees and in lakh or crore words, with owned funds, the line and the excess beside it, and compares it with nothing except a minimum you typed yourself.
The rule behind the steps
The steps above are the calculator's working. The chartered accountant reviewing the page checked three things against the rule:
- 1The source of the formula, cited by section and Explanation
- 2The percentage that sets the allowance line, and the base it is measured on
- 3Which holdings and which lending enter the two exposure lines
Statutory basis: section 45-IA of the Reserve Bank of India Act, 1934, as restated in the Reserve Bank of India (Non-Banking Financial Companies - Registration, Exemptions and Framework for Scale Based Regulation) Directions, 2025. Investments, loans and other exposure to subsidiaries, companies in the same group and other NBFCs, in excess of 10 per cent of the aggregate of the paid-up equity capital and free reserves, are deducted to arrive at net owned fund.
What the calculator does not do
- It carries no minimum. The amount an NBFC must hold depends on its category and the directions in force, and it changes. A figure printed here and left unrevised would mislead, so the worksheet takes the figure that applies to you instead.
- It does not test your category. Which kind of NBFC the company is, and which direction governs it, is for the company and its chartered accountant to settle.
- It verifies nothing. Every line is taken as typed. It does not read the balance sheet, classify a reserve or identify a group company.
- It is not a certificate. The result carries no signature and no UDIN, and no reader acts on it.
Only the amount above the line
How the group exposure deduction works
Group exposure is not deducted in full. The worksheet sets the whole of it against the allowance line and takes away only what sits above the line, which is why two companies with the same exposure can end with different deductions.
What goes into the two exposure lines
Shares
Investment in the shares of subsidiaries and of companies in the same group, at the carrying amount in the accounts, whatever the percentage held.
Lending
Loans, advances and any other lending to those companies, at the balances outstanding at the balance-sheet date.
The two lines are added before the comparison, so a small holding and a large loan to the same company are read together, not tested one at a time. Shares of other non-banking financial companies, inside or outside the group, also count, and so do deposits placed with subsidiaries and group companies: enter the shares in the first line and the deposits in the second.
Example, hypothetical figures
Owned funds after step 1₹15,50,00,000
Allowance line at the worksheet's 10%₹1,55,00,000
Group exposure: shares ₹1,00,00,000 + lending ₹1,20,00,000₹2,20,00,000
Net owned fund: ₹15,50,00,000 − ₹65,00,000₹14,85,00,000
Deducting the whole ₹2,20,00,000 would understate the figure by ₹1,55,00,000. Measuring the line on the balance-sheet total instead of owned funds would overstate it. Both are the mistakes the worksheet is laid out to avoid.
Below the lineExposure smaller than the allowance
Nothing is deducted. The result says that no group exposure deduction arose and the net owned fund equals owned funds.
Exactly on the lineExposure equal to the allowance
Still nothing is deducted: only the amount above the line counts, and at the line that amount is nil.
Negative baseOwned funds below zero
The allowance line is nil, so the whole of the group exposure is deducted and the net owned fund is more negative than owned funds. The result flags it.
Against the figure you were given
Comparing your result with the figure that applies to you
The page prints no minimum. The comparison it makes is only ever against a figure you typed, and it says so beside the result.
Why no minimum is printed here
The amount an NBFC must hold is set for its category and has not stayed the same over time. Any number printed on a page and left unrevised would be planned against, and the plan would be wrong. The direction or letter that applies to your company states the figure; this page does not.
Enter the figure that applies to you in the worksheet
What headroom and shortfall mean
With a figure entered, the result reads Headroom when the net owned fund is at or above it, and Shortfall when it is below, each with the difference in rupees. It is a difference between two numbers you supplied, not a finding that the company meets or fails any requirement.
A position at one date
The result is the net owned fund at the balance-sheet date you gave. A filing or a lender may read it at more than one date, so run the worksheet again from each year's audited accounts rather than carrying one figure forward.
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