NBFC Registration

 For NBFC License in India

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Rs. 2Cr.

 

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NBFC Registration Process

90 Days

 
  1. Name
  2. Incorporation
  3. Bank A/c
  4. RBI Approval

  1. Name Approval

     

    Once we obtain the DIN and DSC of the directors, two proposed names of the company in preferential order will be submitted to MCA (Ministry of Corporate Affairs) for approval. The name of the company must reflect the character of an NBFC.

  2. Company Incorporation

     

    After obtaining the name approval, the prescribed e-form SPICe 32 has been submitted along with the AOA, MOA and subscription statement for incorporating the company.

  3. Bank Account Opening

     

    After incorporation of the company, a bank account will open. The entire sum of Rs. 2 crore shall be deposited as a fixed deposit which is free from all liens. The Reserve Bank of India will verify the deposits held by the company with bankers at the time of considering the application for NBFC license.

  4. RBI Approval

     

    For obtaining the NBFC status an online application will be filed in the form "COSMOS" to the RBI (Reserve Bank of India). Also, the hard copy of the application indicating the online application reference number along with the documents will be submitted to the RBI regional office. Once all the documents are duly verified and approved by the authority, the license will be granted.

 

Types of NBFC in India

Investment Company

Investment NBFC company is used to hold and manage securities for investment purposes

Loan Companies

Loan type of NBFC's principal business is providing finance by making loans

Infrastructure Finance

Infrastructure finance NBFC only works in sector that are energy, transport, water and commercial

Infrastructure Debt

Infrastructure Debt Fund type of NBFC is for infrastructure companies where they create space for commercial banks

Microfinance Companies

Microfinance NBFC's offer small loans to individuals or self help groups with capital less than 50,000



 

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Documents Required for NBFC Registration

 

Following documents are needed to get RBI license for NBFC in India

Photo

Latest passport size photograph is required

ID Proof

Scanned copy of all directors Aadhar card/ Voter ID/ Passport/ Driving License

PAN Card

PAN Card copy of all directors

Registered Address Proof

Latest utility bill(water/electricity/gas). NOC from the owner, Notarized rent agreement in case of rented property

Incorporation Certificate

Certified copy of company incorporation certificate

Board Resolution

Copy of Board resolution stating that the company not carrying any NBFC activity before getting RBI approval

Auditors Report

An auditor's report about the receipt of minimum net owned fund

Bankers Certificate

A copy of bankers certificate and fixed deposit receipt indicating balance in support of Net Owned Fund

Educational Certificate

A copy of highest educational certificate of all directors

Audited Accounts

Audited Balance Sheet, Profit & Loss Account, Directors & Auditors report for last three years (For company already in existence)

What do you get

 

Get everything to RBI NBFC License and Begining Financial Activities

DSC

Digital signature for directors to digitally sign the documents

MOA

Defines the objectives of the NBFC

AOA

Defines the rules of the NBFC

PAN

PAN number of the company

Rubber Stamps

Two rubber stamps, one with the name of company and one with the name of director

Incorporation Certificate

Certificate of incorporation bearing company's registration number and details

License

NBFC license number to operate the financial activities

Questions? Call us on 011-408-44560

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Frequently Asked Questions

What is the meaning of NBFC?

NBFCs (Non-Banking Financial Companies) are the financial institutions that offers certain types of banking and other lending services. These companies are registered under the Companies Act which involved in the business of lending, investment in shares or bonds or debentures or stocks,. leasing, chit business, hire purchase, insurance business etc.

What are the types of NBFCs in India?

The NBFCs operating in India are divided into following broad categories:

  • Asset Finance Company
  • Investment Company
  • Loan Company
  • Infrastructure Finance Company
  • Core Investment Company
  • Infrastructure Debt Fund
  • Micro Finance Company
  • Mortgage Guarantee Company
  • Housing Finance Company
  • Non-operative Financial Holding Company

What are the necessary requirements to obtain the NBFC license?

Any company registered under the Companies Act, 1956 or Companies Act, 2013 and want to commence the business of non banking financial institution should comply with the following requirements:

  • The company should be registered under the Companies Act
  • It should have a minimum net owned fund of Rs. 2 crore

How to calculate the Net Owned Fund (NOF) as per RBI guidelines?

The minimum net owned fund of Rs. 200 lakhs is one of the requirement to obtain the RBI license for working as a non-banking financial company. There is a specific method given by the RBI for calculation of the net owned fund for NBFCs.

The NOF (Net Owned Fund) is calculated on the basis of last audited balance sheet of the company.

Calculation of Net Owned Funds
PARTICULARS AMOUNT
Paid up Capital xxx
(+) Free Reserves xxx
(+) Capital Reserves xxx
(+) Balance in share premium xxx
TOTAL OWNED FUNDS xxxx
(-) Revaluation Reserves xxx
(-) Accumulated Loss Balance xxx
(-) Intangible Assets Book Value xxx
NET OWNED FUNDS xxxx

What will be the consequences for taking the deposits without the authorisation?

If any private or public limited company take the deposits from public without authorisation, it is counted as a criminal offence. Also, if any unregistered business entity accept the public deposits even with NBFC association contravene the RBI guidelines. Consequently, they are also liable to be prosecuted under the criminal law.

What are the advantages of an NBFC?

  • Provide loans and credit facilities
  • Trading money market instruments
  • Funding private education
  • Wealth management
  • Supporting investments in property
  • Advise company in merger and acquisition

Is it compulsory to register every NBFC with RBI?

Every NBFC governed by the Reserve Bank of India (RBI) under the framework of RBI Act, 1934. Therefore, all the NBFCs to commence the business are required to obtain a license from RBI.

Which companies are exempted from the NBFC registration requirements?

There are few companies that are involved in the financial activity but not require NBFC license because they are regulated by the other financial sector regulators.

Type of Entity Regulatory Authority
Chit Fund Companies Respective state government
Mutual Funds SEBI (Securities and Exchange Board of India)
Insurance Companies IRDA (Insurance Regulatory and Development Authority of India)
Nidhi Companies MCA (Ministry of Corporate Affairs)
Venture Capital Companies SEBI
Merchant Banking Companies SEBI
Stock Broking SEBI
Housing Finance Companies National Housing Bank

How NBFCs in India are different from banks?

Banks and NBFCs both are the financial intermediaries whose principal business are almost similar. However, there are a few differences as given below:

COMPARISON NBFCs BANKs
Act Incorporated under the companies act, 1956 or 2013 Incorporated under banking regulation act, 1949
Meaning A financial institution that offers banking services without holding a bank license. A financial intermediary which incorporated with a aim to provide the banking services to general public.
Reserve Ratio There is no requirement to maintain the reserve ratio. All the scheduled banks are required to maintain the reserve ratio with RBI.
Demand Deposits NBFCs cannot accept demand deposits. However, banks can accept the demand deposits.
Fixed Deposits Fixed deposits rated by the rating agencies. Fixed deposits of banks are not rated by the rating agencies.

Can NBFCs accept public deposits?

Only those NBFCs are allowed to accept the pubic deposits which have been granted a license depicting the eligibility to accept the deposits from public. But such deposits should not be the demand deposits.

Is there any limit for accepting the public deposits?

Those NBFCs which have been issued a license from RBI to accept the public deposits are allowed to accept the public deposits. But there have been certain limits imposed on the acceptance of the deposits to ensure not to misuse the NBFC license. The limits for the public deposits are vary on the basis of the following factors:

  • What is the net owned fund of the company?
  • Which type of NBFC is a company? Is it a loan/investment company or asset finance company?
  • What are the prudential norms prescribed by the RBI?
  • What is the credit rating?

What are the types of NBFCs based on liabilities?

Two types of NBFCs based on liabilities:

  • NBFCs- D: Deposit accepting NBFCs
  • NBFCs-ND: Non-Deposit NBFCs

What are the mandatory NBFC compliances?

Compliance for Deposit taking NBFCs

  • NBS-1: Quarterly returns on deposit in the first schedule
  • NBS-2: Quarterly return on prudential norms
  • NBS-3: Quarterly return on liquid assets
  • NBS-4: The annual return of critical parameters by a rejected company holding public deposits
  • NBS-6: Monthly return on exposure to capital market by deposit-taking NBFC with the total assets of Rs. 100 crore or more
  • ALM Return: Half yearly return for audited balance sheet and auditor's report by NBFC accepting public deposits
  • Branch info return

Compliance for Non-Deposit NBFCs

  • NBS-7: A quarterly statement of capital funds, risk-weighted assets, risk assets ratio etc
  • NBS-2: Monthly return on important financial parameters of NBFCs-ND-SI
  • ALM-1: statement of short-term dynamic liquidity (Monthly)
  • ALM-2: Statement of structural liquidity (Half Yearly)
  • ALM-3: Statement of interest rate sensitivity (Half Yearly)
  •  

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