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NBFC Registration Process in India

Saurav Lohia Saurav Lohia | Content Marketer at Corpseed | Updated

Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 involved from the main business of financing, investments in shares/stocks/bonds/debentures, leasing, hire-purchase, insurance organization, chit company or involved in the getting of deposits under any scheme or agreement. NBFC are under the purview of the Reserve Bank of India (RBI) and in this guide we proceed to the process for NBFC Registration in India and a few of the regulations that govern NBFC operations.

 

Non-Banking Financial Company  is like a bank except the following difference

  • NBFC's can't accept demand deposits
  • NBFC's can't trouble cheque drawn on itself
  • Bank deposits are guaranteed by Deposit Insurance and Credit Guarantee Corporation. But, deposits in NBFC's aren't insured.

NBFC's like banks except for the aforementioned differences are engaged in the company of earning advances and loans, trading and acquisition of shares/stocks/bonds/debentures/securities, leasing, hire-purchase, insurance organization, chit company but doesn't include any establishment whose chief business is that of agriculture activity, industrial action, sale or sale of any merchandise (other than securities) or supplying any solutions and sale/purchase/construction of immovable property. Additionally a company that's at the main business of receiving deposits under any arrangement or scheme in 1 lump sum or in installments by means of donations or in any manner, is also a non-banking fiscal firm.

 

Different types of Non-Banking Financial Company (NBFC)

NBFC's are largely categorized into deposit carrying NBFC's and non-deposit carrying NBFC's. Deposit accepting NBFC's and non-deposit accepting NBFC's are categorized according to their dimensions.

Procedure to NBFC Registration

 
Our Expert team will draft & file the application with the NBFC Department & will follows-up with NBFC Department. For more information contact our customer care on +91 7558 640 644 or info@corpseed.com.
 

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NBFC Registration

According to Section 45-IA of the RBI Act, 1934, no corporation may start or continue business of a non-banking bank without obtaining a certification of enrollment and with an Internet Owned Funds of Rs. 200 lakhs. The requirement for enrollment as a NBFC really are a business include under Section 3 of the Companies Act, 1956 and with a minimum net owned funds of Rs.200 lakhs. Internet possessed funds is the equilibrium of "owned capital" minus the quantity of investment in stocks of subsidiaries, businesses in precisely the exact same category and the rest of the NBFCs, publication value of debentures, bonds, outstanding loans and advances including hire purchase and lease finance created to and deposits with subsidiaries and businesses in precisely the exact same group. Earning capital is the aggregate of paid-up equity funding, preference shares that are compulsorily convertible into equity, no cost reserves, equilibrium in share premium account and capital reservations representing excess stemming from sale proceeds of advantage, excluding reserves created by revaluation of asset, after deducting there from gathered balance of reduction, deferred revenue expenditure and other intangible assets.

Program for getting an NBFC has to be made in the requisite form to Regional Office of the Reserve Bank of India. A listing of documents needed to be filed together with the NBFC software could be obtained here: NBFC List of Document Required.

The Reserve Bank of India regulates and supervises companies that are engaged in financial activities as their primary company. A firm that has monetary assets of over 50 percent of its total assets and derives over 50 percent of its gross income from these assets is known as as a NBFC and governed by the Reserve Bank of India. But some financial companies have particular regulators and therefore are granted exemption from Reserve Bank od India from its own regulatory requirements. For Example, Insurance Regulatory and Development Authority (IRDA) governs insurance companies, Securities Exchange Board of India (SEBI) governs Merchant Banking Firms, Venture Capital Companies, Stock Broking businesses and Mutual funds, National Housing Bank (NHB) governs housing fund companies, Department of Companies Affairs (DCA) governs Nidhi businesses and State Governments govern Chit Fund Businesses.

 

Deposit Taking NBFCs

Deposits are monies accumulated in any fashion, aside from that accumulated by means of share funds, participation of funds by the partners of a venture firm, safety deposit, earnest money deposit, and progress account for purchase of goods, construction or services, loans obtained from banks, financial institutions and cash lenders and subscription to chit funds. Monies accumulated in any way other than those could be termed as residue. All NBFCs can't accept public deposits. Just NBFCs that maintain a deposit taking Certificate of Registration can take deposits. Additionally, RBI is of the purview that just nationalized banks can take deposits and hence hasn't approved any NBFC began after 1997 to take deposits.

If any unincorporated entity (Proprietorship / Partnership) or a NBFC without consent to accept deposit is located accepting public deposits, then it's accountable for criminal actions. Furthermore, if NBFCs connect themselves using proprietorship/partnership companies accepting deposits in contravention of RBI Act, then they're also liable to be prosecuted under criminal law or under the Security of Interest of Depositors (in Financial Establishments) Act, if passed by the State Government.

 

Other Allied Activities

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NBFC Registration

Non-Banking Financial Company (NBFC) is that kind of financial institution which offers various financial and non-financial services to business enterprises, individuals, entrepreneurs, etc. NBFC License must be taken from RBI


    
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NBFC - P2P Lending

Peer-to-peer lending platforms offers a simple key to borrow money for short-term necessities. This shall include buying consumer electronics, medical emergency, business loan, home renovation, repay credit card dues, travel loan, or any other such requirements.

 
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Payment Gateway

NBFC Takeover

The procedure for taking over an NBFC is being laid down by the RBI. Takeover of an NBFC refers to purchase of one NBFC by another company. Only registered NBFC under the Act shall undertake to acquire the control of another NBFC.

 
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Nidhi Company

NBFC Funding

NBFCs do not have those prosperities, which means that the NBFCs need alternate sources of the money supply, which are higher than the deposits taken by banks, where the interest rate offered is between 4%-6%.


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NBFC Collaboration

Collaboration means coming together for a shared goal. India has more than 9000 active NBFC but barely 954 the NBFCs have book size more than 40 crores. Rest 8460 NBFCs are only able to meet the regulatory cap of the loan book of INR twenty Million.

    
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NBFC Compliance

RBI and other related regulators set rules and regulations, which keep on altering because of changing needs and circumstances. It is important for the NBFC management to know about what to do and how to do it, and there is a strong need to keep abreast of the times.

 
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How to apply for Non-Banking Financial Companie in India

 

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Connect With Corpseed

Connect with the team corpseed to discuss specific requirements for your business at IVR: +91 7558 640 644 or hello@corpseed.com. It takes 20-25 minutes to discuss requirement.

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Dedicated Manager

Once you discuss the requirement, we will align a dedicated Account managers are here to help understand your business and provide best solutions and assist you with the entire process.

Payment Gateway

Real Time Update

Use our platform to track progress of application and many more. Always know what is going on with your application, what is in progress, and what is done.

Nidhi Company

Job Completed

Once job is completed, you will receive documents directly to your email ID and at your doorstep along with 30 days payback guarantee incase not satisfied with the services.

 

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