Looking For Registering NBFC?
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What is an NBFC?
To define
NBFCs, these are the companies where more than 85% of their consolidated annual
gross sales or consolidated assets are financial in nature. NBFCs are the
companies which are 'predominantly engaged in financial activity'. Investment
banks, mortgage lenders, money market funds, insurance firms, hedge funds,
private equity funds, and P2P lenders are examples of NBFCs. Non-banking
financial companies (NBFC) are now highly and hugely reputed. Because of their
all-round and lavish support to the traders, industrialists, investors and
public borrowers, NBFCs are now considered as an excellent and vital
complementary to the institutions in the financial and banking sector of India.
NBFCs mainly cover industrial and commercial loans, public deposits, investments
funds and chit business, leasing, stocks and bonds, insurance business,
hire-purchasing and other activities similar to these.
Registration
Number
Only after
the proper and flawless registration under NBFC category, Reserve bank of India
issues the NBFC registration number.
It is the identity of the company and is essential for its reliability and tax
related calculations. In addition, they provide the legal security to the
concerned company. In order to procure the registration number, NBFCs must fulfil
the conditions set out for the category under which it is willing to register.
NBFC registration is essential for any company doing business in these areas
and the total financial flow in its business is increased to more than 50% and is
duly registered under the Companies act 2013.
Registration
of NBFC
Formation
and Incorporation – To register any NBFC, first step
would be formation and incorporation of the company. It is essential that the
concerned company is a registered company. Either under the Companies act 2013
or 1956.
Minimum Net
Owned Capital – It is another requisite necessary for the aspirant
company. Net owned fund or capital of 2 crore INR must be possessed by the
company. This paid up equity capital must not be preference share capital and
shall be equity share capital.
Fresh Bank
account – The said minimum paid up equity capital shall be
deposited in a fresh deposit account. This account may be maintained in any
bank but shall must be free from all liens. In general, these funds shall be
maintained in fixed deposit account. Reserve Bank of India verifies the concerned
bankers about the deposits of the aspirant company at the time of considering
the application. So, while making the application for grant of NBFC registration, the essential net
owned funds must be present in that account.
Application
for NBFC registration – Initially, the aspirant company
will make an application online at the secured website of Reserve Bank of India
which would issue an application reference number to the company. Further the
company would be required to submit the hard copy of the application made along
with reference number in duplicate and other requisite documents like Annexure
I, Annexure II and Annexure II and in addition to these, other documents which
contains information in relation to incorporation of the company, Memorandum of
Association, Articles of Association, documents regarding management and
administration of the company, location of the company, income tax, PAN,
audited financial accounts etc.
Grant of
Registration certificate – The registered application and
documents are then scrutinized thoroughly by the regional office of Reserve
Bank of India. After critically verifying all the documents and application and
finding it satisfying and complete and as per the requirements, the regional
office would forward the same to central office of Reserve Bank of India. The
central office would then again scrutinize the said application and documents
and would forward the same to the applicant along with the grant of NBFC
registration certificate. Only if the company is satisfying and complying with
the described conditions in Section 45-IA of the Reserve Bank of India Act of
1934.
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