Non-Banking Financial company is a financial institution which sums up banking and non-banking facilities like hire purchase, leasing, investment funds, insurance business, bonds, etc. NBFC is a bridge between investors and borrowers, and their main task is to raise capital funds from the investors and depositors and lend them to the borrowers.
How to Get Your NBFC Incorporated?
In today’s time, they are becoming a common choice among people and banks as they provide a great support system. They have slowly made important contributions in India, leading to immense popularity among people. So, the common people need to know the document checklist for the incorporation of NBFC.
NBFC and RBI
RBI has made some regulation in the functioning of the NBFC in accordance with the Reserve Bank of India Act of 1934, Section 45-IA of which says that NBFC cannot commence nor do business with a non-banking financial institution without getting registered and should have a net owned fund of Rs. 2 crores. However, there are some NBFCs which are regulated by other regulators and are exempted from registration with RBI. Such as venture capital fund or merchant banking companies, stock broking companies that are registered with SEBI. Some insurance companies have registration under IRDA, Nidhi companies, chit companies, housing finance companies, stock exchange, or mutual benefit companies.
Documents Checklist
The documents required for the NBFCs registration in type II – NBFC-ND includes: Also Read: Top 10 Non-Banking Financial Companies (NBFCs) in India
Other Documents
Apart from the other documents mentioned, the Board resolution should state the company to be a member of all the credit information companies, and it will also acquire membership of at least one self-regulatory organization. With this, the Board Resolution should also state that the company has a fixed internal exposure limit. Also, the company will follow the rules and regulations, taking into consideration the dealing with the pricing of credit, fair practice, and non-coercive method of recovery. Another important requirement is that it should mention that the company is not registered under section 8 of the Companies Act, 2013. Following are the additional documents required for the registration along with the applications:
NBFC Registration Process in India
Steps of getting NBFC incorporated in India: Step 1 The first step is to apply online by accessing RBI’s secured website. Step 2 Next, a login page of the COSMOS application will appear on the window. The applicant has to click on the company registration on the login page. An excel page of the application form will be displayed on the screen available for download. Now, the applicant company can download this excel application form and fill all the required details in the form and upload it. After this, a company application reference number will be generated. Step 3 This is an important step where the company has to note down the correct name of the regional office in the field C-8 of the “Annex-Identification Particular” mentioned in the application form. After filing the online application, the applicant has to submit the hard copy of the application form along with the required documents mention in the NBFC incorporation checklist to the regional office of RBI. After submitting all the documents along with the hard copy of the application, the applicant can check the online status of the application with the help of the company application reference number generated in step 1.
Important Points for NBFC Registration
NBFC plays a very prominent role in the development of the country in terms of infrastructure, wealth, transport, and employment. Apart from the development, NBFC empowers the economically weaker sections of the society through financing them. This continuous effort of the NBFC is changing the face of the Indian economy. Also Read: Get Instant Cash Loan Online In India Looking into the registration part, starting an NBFC requires lots of documentation and is a long process. For getting registered, you need to comply with the document mentioned in the checklist for getting your NBFC Incorporated. Acquiring the NBFC license is a hard process as it requires approval from RBI. So, before you apply for the incorporation of NBFC, you should seek an expert opinion.
