NBFC REGISTRATION
- Home /
- NBFC REGISTRATION
Keynotes on NBFC Registration
NBFCs (Non-Banking Financial Companies) are financial institutions that provide a range of financial services without holding a banking license. If you’re interested in registering an NBFC, Law Sarathi offers the fastest registration services available. Our qualified and experienced consultants are ready to guide you through the registration process.
At Law Sarathi, we deliver affordable NBFC registration services. Our skilled team is adept at preparing, filing, and processing the necessary registration documents, ensuring everything is handled efficiently. Feel free to reach out to us for information on the costs associated with NBFC registration.
Our professionals are well-versed in the online registration process for NBFCs. We can help you establish your startup quickly and smoothly. Contact us today to learn more about our competitive fees for NBFC registration services and let us assist you in launching your business!
A Non-Banking Financial Company (NBFC) is a firm incorporated under the Companies Act of 1956 or the Companies Act of 2013. While NBFCs do not hold a banking license, they offer a variety of financial services, including:
However, certain activities disqualify a company from being classified as an NBFC. These activities include:
Currently, various types of Non-Banking Financial Companies (NBFCs) are operating in India. Based on their authorization to accept deposits, NBFCs can be classified into the following categories:
If the total assets of an NBFC exceed ₹100 crore, it is classified as a Systematically Important NBFC, reflecting its significant role in maintaining the financial stability of the country.
At Law Sarathi, we offer comprehensive assistance with NBFC registration, including developing NBFC Fintech business plans and providing NBFC software solutions. Our end-to-end support ensures a smooth registration and management process for NBFCs in India.
Our dynamic team of IT professionals has extensive experience in providing support for NBFC software registration to our clients.
Asset Finance Company:
These companies specialize in financing various assets for firms, including automobiles, machinery, equipment, generators, and industrial machines.
Loan Companies:
These companies primarily focus on providing loans and advances that are not secured by assets. Their services typically include working capital financing and other non-asset-based lending.
Investment Company:
This type of company engages in trading and dealing in securities.
Systematically Important Core Investment Company (CIS-ND-SI):
This classification applies to companies with assets worth ₹100 crore or more that allocate at least 90% of their assets in loans or debt instruments to group companies. Such companies are typically involved in equity shares or must convert their holdings into equity shares compulsorily.
Infrastructure Finance Company:
A company qualifies as an Infrastructure Finance Company if it has a minimum net worth of ₹300 crore and allocates at least 75% of its total assets to infrastructure loans. Additionally, it must have a credit rating of 15% or higher.
Non-Banking Financial Company:
This type of non-deposit-taking NBFC must have at least 85% of its assets allocated to microfinance.
Infrastructure Debt Fund (IDF-NBFC):
These funds primarily invest in the infrastructure sector, addressing crucial long-term needs and extended gestation periods, which makes them vital for the country’s development.
There are several key differences between NBFCs and banks:
Deposit Acceptance: NBFCs are not authorized to accept demand deposits from the public.
Deposit Protection: Depositors with NBFCs do not have access to the provisions of the Credit Guarantee Corporation or Deposit Insurance.
Payment Systems: NBFCs are not part of the payment and settlement systems and are not authorized to issue cheques in their own name.
The registration of a company must adhere to the provisions, rules, and regulations outlined in the Companies Act 2013 or the earlier Companies Act 1956. Here are the key requirements:
Registration under Section 3: The registration must be conducted under Section 3 of the Act.
Experienced Directors: At least one-third of the directors must have experience in finance.
Minimum Net Owned Fund: The company should have a net owned fund of at least ₹2 crore, which should not consist of borrowed funds. (Minimum owned fund requirements vary for specific types of NBFCs, such as NBFC Factors, NBFC-MFIs, and CICs, depending on their classification.) Notably, gifts from a spouse are considered owned funds.
Five-Year Business Plan: A comprehensive business plan for the next five years must be in place.
In this case, the minimum owned fund must be ₹3 crore, with a Capital to Risk-Weighted Assets Ratio (CRAR) of 15% and a Non-Performing Asset (NPA) ratio not exceeding 3% of net advances. Additionally, the company must have been in existence for the last five years and must have been profitable for the last three years.
At Law Sarathi, we are the leading NBFC software company in India, utilizing a state-of-the-art platform to ensure a swift and hassle-free NBFC registration process.
Non-Banking Finance Companies (NBFCs) play a crucial role in bridging the credit gap left by banks. They offer faster loan processing through advanced technology compared to traditional banking institutions. The registration process for NBFCs is governed by the Ministry of Corporate Affairs and follows the rules and regulations set forth by the Reserve Bank of India (RBI).
Step 1: Engage Experienced Professionals
Hire knowledgeable professionals such as Chartered Accountants (CAs), Company Secretaries (CSs), lawyers, or ex-bankers. It’s advisable to assemble a team of over 100 consultants.
Step 2: Qualify for Eligibility Test
The NBFC advisor must demonstrate eligibility based on experience in accordance with the RBI Act.
Step 3: Company Registration
Register the company (recommended authorized share capital of ₹2.5 crore), open a bank account, and apply for a GST number.
Step 4: Appointment of Auditor
Choose an auditor who is knowledgeable about the RBI Act and has experience in auditing NBFCs, as per RBI guidelines.
Step 5: Formation of Board of Directors
Ensure the accurate formation of the Board of Directors to facilitate a smooth NBFC licensing process.
Step 6: Select the Type and Customer Interface Option
Determine the appropriate type of NBFC and the customer interface options.
Step 7: Develop a Comprehensive Business Plan
Create an advanced business plan with assistance from NBFC professionals.
Step 8: Set Up Capital
Establish a minimum capital of ₹2 crore and make a fixed deposit of the same amount.
Step 9: Review Application
Have the application reviewed by a qualified professional.
Step 10: File Online Application
Submit the application online.
Step 11: Physical Submission to RBI
Deliver the application to the RBI office in person.
Step 12: Respond to RBI Inquiries
Be prepared to proactively address any questions or clarifications requested by the RBI.
Step 13: Receive Final Decision
The RBI will communicate its final decision within 90 to 120 days.
Step 14: File for Commencement of Business
Submit the commencement of business filing to the RBI within six months of receiving the NBFC license.
Step 15: Comply with RBI Directions
Adhere to the RBI’s directives and regulations for NBFCs as they are updated.
1. Certified Copy of Registration Certificate
Obtain a certified copy of the Certificate of Incorporation (COI), Memorandum of Association (MOA), and Articles of Association (AOA) from the Regional Registrar of Companies.
2. Latest KYC
Provide updated Know Your Customer (KYC) documentation along with income proof for all directors and shareholders.
3. Net Worth Certificate
Acquire the most recent net worth certificates for the directors, shareholders, and the company.
4. Clean Banker Report
Obtain a banker report confirming no issues related to the primary fixed deposit of ₹2 crore.
5. Proof of Education
Submit documentation verifying the educational or professional qualifications of the directors.
6. Credit Reports of Directors and Shareholders
Provide up-to-date credit reports for all directors and shareholders.
7. Experience in the Finance Field
Include the profile of at least one director with over 10 years of experience in the financial services sector.
8. Underwriting Model
Submit a detailed action plan outlining the fair practice code, loan products, risk assessment policy, and credit procedures.
9. Organization Matrix
Outline the organizational structure and the decision-making process for approving or rejecting loan applications.
10. System and IT Policy
Provide the information technology policy for the company.
At Law Sarathi, we offer comprehensive support to facilitate online NBFC software registration and ensure a swift launch of your proposed NBFC company.
This portal is owned and operated by Lawsarathi and is not affiliated with any government authority or agency. We gather information from our clients solely to help our experts better understand their business or needs. By continuing to use this website, you acknowledge that Lawsarathi is a private company, providing services based on customer requests. The fees collected through this website are consultancy fees.
©2024 Copyright - Lawsarathi - All Right Reserved