How to register an NBFC?

A company registered under the Companies Act having the principal business activity of providing financial services is a Non-Banking Financial Company (NBFC). The NBFCs are regulated by Chapter IIIB of the RBI Act. In order to get registration as an NBFC, the company has to fulfill the requirements as provided in the Act.

NBFC undertakes Financial activities as their principal business operation. This can be understood as, where the financial assets of the company constitute more than 50% of the total assets and the earnings from financial assets comprises more than 50% of gross income.

This article is designed to help gain information regarding mandatory compliances for obtaining CoR from RBI by the company desirous to step into the financial business.

Companies exempted from obtaining Certificate of Registration (CoR) from RBI:

There are certain entities, though being involved in financial activities does not require CoR from RBI as such entities are governed by other Acts. The exempted categories of NBFC are:

• Venture Capital Fund
• Merchant Banking companies
• Stock Broking Companies
• Insurance Company 
• Nidhi Companies 
• Chit Companies 
• Housing Finance Companies

Mandatory requirements for obtaining CoR from RBI:

A company willing to work as an NBFC must fulfill the below-mentioned conditions:

• The company must be registered under the Companies Act, 2013.
• The company must maintain Net Owned Funds (NOF) of Rs. 2 crores. (The requirement of NOF is different for some specific categories of NBFCs)

How to file an application with RBI to obtain CoR?

Applications for obtaining registration with RBI shall be made through online mode, after which physical copies of all the mandatory documents must be submitted to the Regional Office of RBI.

• You can submit an online application through the COSMOS portal by clicking on Company Registration.
• After which an application form (in excel format) will be available for download.
• The applicant shall download the appropriate form, then fill in all the mandatory details and upload such a form.
• Once the form has been submitted successfully, a Reference Number will be generated.
• Subsequently, submit a physical copy of the application form along with requisite documents at the Regional Office of RBI. (Please note that the Reference Number must be mentioned on the physical copy of the application.)
• The applicant can check the status of his application through the Reference Number as generated earlier.

Essential documents / information to be submitted along with Application:

• Copy of Application 
• Statutory Auditor Certificate
• Financial Information of the company
• Auditor report
• Information on Management
• List of Directors
• List of Shareholders
• Net Worth Certificate for all shareholders
• Electronic Infrastructure declaration by all the directors
• Declaration as per section 45S of Chapter III 
• PAN of all the directors
• Aadhar of all the directors
• Proof of director’s qualification
• Experience Certificate of all the directors
• List of all the companies in which directors hold substantial Interest
• CIBIL for all companies (in which directors hold substantial interest)
• CIBIL for all the directors
• Company COI
• MOA of the company
• AOA of the company
• BR to make application to RBI
• BR for Fair Practice Code
• BR company is not carrying any Business Activity
• Shareholder declaration (not convicted of any crime)
• Fair Practice Code
• FD receipt from Company Bank
• No lien Certificate off Company’s bank
• Banker's certificate from Company’s bank
• Banker Certificate by all the companies in which director hold a substantial interest
• Audited/Provisional balance Sheet of the company 
• Balance Sheet and auditor report of all the companies in which director hold a substantial interest
• Five-year Business Plan
• Five years projected Financials of the company
• Write-up of Directors Experience
• Certificate from auditor