• How to register a NBFC company

About nbfc
Asked 6 years ago in Income Tax

You need to register yourself with ROC and RBI.

Vivek Kumar Arora
CA, Delhi
4863 Answers
1052 Consultations

5.0 on 5.0

Hi,

The working and operations of NBFCs are regulated by the Reserve Bank of India (RBI) within the framework of the Reserve Bank of India Act. Section 45-IA provides that no NBFC shall commence or carry on the business of Non- Banking Financial Institution without obtaining a Certificate of Registration issued by the Reserve Bank of India.

The first step is to form a new Company (Private Limited or Public Limited) under the Companies Act. Minimum Net Owned Fund should be Rs. 200 lakhs. An Application to RBI for Business Operations has to be made. RBI will conduct due diligence and will issue certificate of commencement of business.

Hope that clarifies.

Regards,

Nikhil.

Nikhil Khanna
CA, Mumbai
1429 Answers
19 Consultations

4.8 on 5.0

Any entity desirous of commencing the business of NBFCs must, before applying to RBI for the license, fulfill the following two criteria:

It should be a company registered under Companies Act, 2013 or previous Companies Act, 1956.

It should have minimum net owned funds of INR 2 crore.

After satisfying the above conditions, an online application available on RBI’s website (COSMOS) should be filled in along with all the necessary documents. Thereafter, a CARN number will be generated which shall be preserved for inquiring about the status of the application. Subsequently, the hardcopy of the application along with attached documents should be submitted to the regional branch of RBI. A license will be granted only after careful scrutiny of the application and documents attached to it.

However, certain financial companies such as Housing Finance Companies, Merchant Banking Companies, Stock Exchanges, stockbroking/sub-broking companies, Venture Capital Fund Companies, Nidhi Companies, Insurance and Chit Fund Companies are NBFCs, but they have been exempted from the obligation of registration under the RBI Act, 1934 subject to certain conditions.

Sidhant Arora
CA, Delhi
10 Answers

5.0 on 5.0

Hi

In order to apply and obtain NBFC License, the following are the basic requirements:

1. A Company Registered in India (Private Limited Company or Limited Company); and

2. The company must have minimum Net Owned Fund of INR 2 cr.

Please let us know if you fulfill the above criteria and what are you specifically require?

Abhishek Dugar
CA, Mumbai
3576 Answers
183 Consultations

4.8 on 5.0

Hi,

A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 with activities similar to that of a bank, except for the following differences:

NBFC’s cannot accept demand deposits

NBFC’s cannot issue cheque drawn on itself

Bank deposits are insured by Deposit Insurance and Credit Guarantee Corporation. However, deposits in NBFC’s are not insured.

NBFC’s like banks except for the above differences are engaged in the business of making loans and advances, acquisition and trading of shares/stocks/bonds/debentures/securities, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property. Also a company which is in the principal business of receiving deposits under any scheme or arrangement in one lump sum or in installments by way of contributions or in any other manner, is also a non-banking financial company.

Procedure for registering NBFC:

Before the company to register in NBFC, it should have registered in RBI. The reason is that the regulations and operation of NBFC will be as per the RBI Act, 1934. Hence, section 45-IA RBI, 1934 mentions that to be an NBFC member, it should be a member of RBI.

According to RBI Act, NBFC member should have a minimum net of Rs.2 crores.

To register in RBI, the company should fill in the application form prescribed by the RBI. The company should also submit all the necessary documents.

When the company satisfies all the terms and conditions of RBI, including the documents, it will be issued a certificate. This certificate is called as 'Certificate of Registration'.

Then, the NBFC can accept public deposits after the possession of this certificate.

NBFCs to accept public deposits, they should follow all the terms and conditions prescribed in the Non-Banking Financial Companies Acceptance of Public Deposits Directions, 1998.

The main work in registering NBFC is to obtain the license from RBI.

Thanks

Damini

Damini Agarwal
CA, Bangalore
407 Answers
31 Consultations

5.0 on 5.0

Ger registered under companies Act 2013 first,then with RBI

Swati Agrawal
CA, Mumbai
1146 Answers
7 Consultations

5.0 on 5.0

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