CC.No. 12 /02.01/99-2000 dated January 13, 2000, it was provided that NBFC must obtain prior approval of RBI before applying to the Registrar of Companies (ROC) for change of name.

These companies are under obligation to fulfill the statutory requirements imposed by the Companies Act and RBI.

Where the depositor dies, the company may repay the deposit at the request of the joint holders within the lock-in period.

Define a Non-Banking Financial Company (NBFC)?

The company registered under the Companies Act, 2013 whose principal business is Financial activity such as chit fund business, insurance business, loans and advances, acquisition of shares or other types of securities, leasing, etc. is a Non-Banking Financial Company (NBFC).

A Non-Banking Financial Company (NBFC) is a financial institution that works like a bank but does not have a banking license offering financial products and services to customers.

Companies need funds to fulfill their daily obligations to run their business efficiently, some of the basic funding requirements are: Fulfill everyday operational requirements and support business needs; For business expansion,  Increasing the standards of business, Coping with rising competition in the financial market, Developing better products and services to meet the customer’s needs etc.

This article focuses on providing the variance between NBFC and Fintech companies.

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.

The computation of the "Net Owned Fund" can be done as:  (a) Aggregate the paid-up equity capital and free reserves as per the latest balance sheet of the company after deducting therefrom the accumulated balance of loss; deferred revenue expenditure; and other intangible assets; and (b) Deduct the following – Investments of such companies in shares of its subsidiaries; companies in the same group; all other non-banking financial companies; and Book value of debentures, bonds, outstanding loans and advances (including hire-purchase and lease finance) made to, and deposits with, subsidiaries of such company; and companies in the same group,to the extent, such amount is more than 10% of (a) above.