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NBFC Registration Online Process in India


NBFC Formation Importance in India

Non-Banking Financial Companies (NBFCs) are businesses that engage in financial activities such as lending money and investing in securities. Asset finance companies, merchant bankers, and insurance companies are all controlled by the RBI, although not all of them are. The RBI has exempted companies that fall under the authority of a separate regulator, such as SEBI or IRDA.


NBFC firms are subject to the authority of the Reserve Bank of India (RBI), and an RBI licence is necessary before engaging in any NBFC business activity. NBFC Registration online can be done through various consultancies.


What is the difference between banks & NBFCs?

NBFCs lend and invest, and so their operations are similar to those of banks; nevertheless, there are a few distinctions, as listed below:


i. The NBFC is unable to receive demand deposits.

ii. Because NBFCs are not part of the payment and settlement system, they cannot issue cheques drawn on themselves.

iii. Unlike banks, NBFC depositors do not have access to the Deposit Insurance and Credit Guarantee Corporation's deposit insurance facility.


The primary nbfc registration requirements to get RBI License is that the company be registered under the Companies Act of 2013

  • The minimum net owned funds should be at least 200 lakhs ( 2 Crore )

  • Professionals with experience in NBFC activities, such as Company Secretaries and Chartered Accountants, should be included in the promoters' profile.

  • NBFCs cannot accept deposits unless they are authorised by the RBI; NBFCs that accept deposits are referred to as deposit-taking NBFCs.

Documents Required for NBFC Formation

  • Certified Copies of the Company's Certificate of Incorporation

  • Certified copy of the MOA's Main Object Clause

  • A certified copy of the company's AOA KYC of Directors and Shareholders

  • Networth Company Certificate, Shareholders, and Directors

  • Bank Non-Lien Fixed Deposit Report Education Proof of Directors and Shareholders

  • Directors' and Shareholders' Credit Report

  • Certificate of Experience in the Financial Services Industry


NBFC Registration Procedure


The following is the nbfc registration procedure to acquire RBI licence:


1. Register a Company

Only companies registered under the Companies Act are eligible to apply for an NBFC licence from the RBI. It is vital to remember that the principal goal of the NBFC firm must be to engage in NBFC operations, hence the Memorandum and Articles of Association must reflect this. A company can be registered as either a private limited company or as a public limited company. A statement must be given at the time of the company's establishment stating that the firm will not conduct business until the requisite clearance from the sectoral regulator is acquired.


2. Open a bank account and deposit a certain amount.

After the company registration procedure is completed, a bank account must be formed and the subscription amount must be put in the company's bank account. Please keep in mind that promoters cannot do any business unless they get a licence from the RBI.


3. Increase the Company's authorised and paid-up share capital

As the primary condition for applying for an RBI licence is to have a minimum net owned funds of Rs. 200 Lakhs, the firm must have such capital at the time of applying for an RBI licence. In this case, we must increase the company's capital to Rs. 2 crore and change the company's Memorandum of Association appropriately. To expand the paid-up share capital of the firm, the corporation must issue shares to current or new shareholders via a rights issue or private placement.


4. Make a Rs. 2 Core fixed deposit with the bank and acquire a Fixed Deposit Certificate.

Following the increase in paid-up share capital, the firm would have money of Rs. 2 Crore, which should be deposited with the bank in the form of a Fixed Deposit.


5. Creating the appropriate set of documents for both online and offline applications:

  • In the case of public limited businesses, certified copies of the Certificate of Incorporation and the Certificate of Commencement of Business.

  • Certified copy of solely the principal object clause in the MOA pertaining to the financial enterprise.


Board resolution stating that:


a) The business is not carrying on any NBFC activity/has ceased NBFC activity and will not carry on/begin NBFC activity until it receives registration from the RBI.

b) the UIBs in the group in which the director has a considerable stake or has not taken any public deposit in the past/does not hold any public deposit as of the date and will not accept the same in the future.

b) In accordance with RBI guidelines, the company has developed a "Fair Practices Code."

d) the firm has not taken public money in the past/does not hold any public funds as of the date and will not accept them in the future without the Reserve Bank of India's consent.

e) The firm does not have any client interface as of today and will not have any customer interface in the future until the Reserve Bank of India approves.

  • Copy of Fixed Deposit receipt and bankers certificate of no lien starting balances in support of NOF Banker's report in respect of applicant firm, its group/subsidiary/associate/holding company/related parties, directors of the applicant company with major interest in other businesses.

  • The banker's report should detail these entities' interactions with these bankers, whether as a depositing or borrowing entity.

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