NBFCs or Non-Banking Financial Company are registered under the Companies Act 1956/Companies Act 2013. Though these do not possess a banking license, yet are involved in various financial services. Some of the services include:
And if the company is engaged in other activities, then it is not registered as an NBFC. Some of the activities are:
| Company Type | Regulators |
|---|---|
| NBFCs registered with RBI | Regulation, supervision, surveillance and enforcement under RBI |
| NBFC regulated by other regulators | Depends on the type of institution |
| Housing Finance Institutions | National Housing Bank |
| Merchant Banking Company/Venture Capital Fund Company/Stock Broking/Collective Investment Schemes (CIS) | Securities Exchange Board of India |
| Nidhi Companies and Mutual Benefit Companies | Ministry of Corporate Affairs |
| Chit Fund Companies | State Government |
| Insurance Companies | Insurance Regulatory and Development Authority |
| Non-Banking Non-Finance Companies | Regulation, supervision, surveillance and enforcement under the Companies Act 1956. |
For a company to be considered an NBFC, it should be registered as per the rules, regulations, and provisions mentioned in the Companies Act 2013 of the Companies Act 1956.
The minimum owned fund for this should be Rs.2 crore and this shouldn’t be borrowed fund. (This limit is different in other cases like that of specialized NBFCs like NBFC-MFIs, NBFC Factors, CICs, as it is decided on the kind of NBFC). Any gift from spouse comes under owned-funds.
At least 1/3rd of the directors must have some experience in finance.
Also, there must be a detailed plan for the next 5 years.
For a company to be considered as IDF-MF, the minimum owned fund should be at least Rs.3 crore, CRAR of 15% and NPA not more than 3% of the net advances. Along with this, the company should be operational for the last 5 years and profitable in the last 3 years.
Significant documents required for NBFC Registration in India are as follows:
NBFCs can lend both secured and unsecured loans based on their alternative lending models. These companies play a significant role in the financial services of the economy and have gone considerable changes in recent years. And after adopting high-end tech-based business models, the roles offered by them are:
NBFC registration is the service we provide for you to register a Non-Banking Financial Company (NBFC). The companies under this list deals in providing financial services only. Like providing loan or credit to other institutions.
You should visit our website and follow the procedure given below.
We charge Rs.6,00,000 + Government fees for it.
An online application is to be made in the prescribed format with
information regarding the demanded documents and enclosures, which generates a
Company Application
Reference Number.
– A hard copy of the above-mentioned application along with demanded
documents and
enclosures to the concerned Regional Office of the RBI.
– After the verification and approval of the submitted application and
documents, the
regional office sends the application to the Central Office of RBI, which goes
through crucial
examination to grant the Certificate.
-If the terms and conditions under section 45-IA of the RBI Act, 1943 are fully
satisfied the
Certificate will be granted.
The list of documents required for NBFC registration in India is given below:
– Documents related to the administration and management of the company
– Company Incorporation Certificate
– The MoA and the AoA of the applicant-company or firm
– Documents describing the location of the company
– Detailed information about Directors or Partners of the Company
– Accounts of the company well-audited for last three consecutive
years
– Board Resolution in favor of NBFC formation
– Bank Account with a minimum paid-up equity share capital of INR-2
Crore
– Income tax PAN, etc.
There are multiple types of NBFCs and these are:
• Asset Finance Company
• Investment Company
• Loan Company
• Infrastructure Finance Company
• Micro-Finance Company
• Core Investment Company
NBFCs can raise their funds different sources given below:
Through financial institutions like banks, insurance companies, public deposits (only for NBFCs holding license to accept deposits from RBI).
Through the issue of debentures, commercial papers and other inter-corporate loans.
In case any NBFC is found accepting deposits without authorization, then it would be considered as a criminal act. And so, these companies are persecuted under criminal law or the Protection of Interest of Depositors Act, if passed by the State Governments.
Yes it is mandatory to register it with the RBI, if your company wishes to carry lending/investment business, then it is necessary to get it registered.
Of course you can. But your company has to give up the local lending license after the grant of NBFC license.
No, the whole capital must be owned and tax paid. Any gift from a spouse will come under owned-capital and not borrowed.
No it’s not mandatory. Your company can either develop a software or source NBFC software after RBI approves your application.
Yes, it is legal to use the initial amount just after the receipt of the RBI’s approval.
Yes it is mandatory. If there is no financial experience, then you can hire professionals who do have some experience.
No, it’s not necessary to hire a consultant to carry out this process. But the whole process takes about 4 months to be through and for this, you must have some domain experience for ease of the process. So, for this, we advise you to avail of our expert services provided by our portal at LegalRaasta.
The following are the prudential norms:
– Non-Banking Financial (Deposit Accepting or Holding) Companies -Prudential Norms
(Reserve Bank) Directions, 2007
– Non-Systemically Important Non-Banking Financial (Non-Deposit Accepting or Holding)
– Companies Prudential Norms (Reserve Bank) Directions, 2015; and
– Systemically Important Non-Banking Financial (Non-Deposit Accepting or Holding)
Companies Prudential Norms (Reserve Bank) Directions, 2015.
Every NBFC is not authorized to accept public deposits. Any NBFC needs to hold a valid certificate that validates their registration and authorizes them to accept and hold public deposits.
No, any NBFC needn’t maintain SLR and CRR.
With the increase in demand for credit, loans, and other financial services, our economy depends on NBFCs.
Liquetax, Private Limited SF-193, Second Floor Gaur City Centre,
Gautam
Buddha Nagar, Greater Noida, UP India, 201009
Reliable
Affordable
Assurity
They've been very helpful in our registration with ICEGATE. It was a small thing with a small amount paid which somehow escalated to a very painful procedure. Never did they say "You've only paid so much. It's too much effort for us.".
