NBFC REGISTRATION IN INDIA
NBFC registration can be obtained by complying with the provisions of the Companies Act, 2013.
NBFC registration can be obtained by complying with the provisions of the Companies Act, 2013.
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Securing NBFC registration in India is a process undertaken by companies registered under the Companies Act, 2013, overseen by the RBI as per the RBI Act, 1934. NBFCs hold a crucial position in the Indian economy, facilitating financial operations and stepping in to fulfil banking needs when traditional banks fall short in extending loans and advances.
Moreover, non-banking financial corporation (NBFC) banks are predominantly involved in accepting deposits as per the prescribed schemes and arrangements. Depositors have the option to contribute either in a lump sum or through instalments.
Further, the operations of NBFCs are regulated and overseen by the RBI in accordance with the provisions outlined in the RBI Act of 1934. As per Section 45-IA, no NBFC in India is permitted to commence or conduct business operations without obtaining an NBFC Registration Certificate.
The RBI is the sole authority in India that is entrusted with issuing NBFC registration certificates. Over recent years, the RBI has streamlined policies and regulations for NBFCs, making the process of obtaining a registration certificate easier than in the past.
An NBFC, or Non-Banking Financial Company, is a corporate entity registered by the regulations outlined in the Companies Act 2013. Consequently, NBFCs fall under the regulatory purview of the Reserve Bank of India (RBI).
Nevertheless, NBFC banks are engaged in offering services like loans and advances and acquiring stocks, equities, and debts issued by the government or any local authority.
Further, NBFCs are indeed different from both commercial and cooperative banks.
Unlike traditional banks, NBFC registration can be instant and quicker. Further, a shorter time and Cost are required than a traditional bank license.
NBFC banks can now swiftly recover loans through legal actions like asset attachment, foreclosure, or repossession.
Despite significant recent changes, the NBFC banking sector in India is expected to maintain a Compound Annual Growth Rate (CAGR) of 18.5% between 2021 and 2026.
Obtaining NBFC registration is simpler than registering as a small bank, given that NBFCs primarily focus on catering to small borrowers.
In accordance with Section 45-IA of the RBI Act, 1934, the following conditions must be met by a company applying for NBFC registration:
In India, given below activities are not considered as NBFC’s.
Given below are the differences between NBFC and banks based on their criteria.
| Criteria For Comparison | Non-banking Financial Corporation | Banks |
|---|---|---|
| Act of regulations | Companies Act, 2013 | Banking Regulation Act, 1949 |
| Demand deposits | Demand deposit not acceptable | Can accept demand deposit |
| Drawing of a Cheque | Cheques cannot be drawn on its own | Cheques can be drawn and issued |
| Deposit Insurance Facility | NBFC depositors are not available with this facility | This facility is available for bank depositors |
| Asset restructuring | Allowed | Not Allowed |
| Maintenance of Reserve Ratios | Not Mandatory | Maintaining the reserve ratio is mandatory |
| Loan sanction | Quicker and Easier | Comparatively rigid |
| Product Offering | Mostly Property Loans | All kinds of loans |
| Foreign Direct Investment (FDI) | Allowed up to a certain limit | Permissible |
| Statutory Reserve Ratio (SLR) | 15% SLR: A Must for Deposit-taking NBFCs | Maintaining SLR is mandatory |
Given below are some of the specific roles and functions of NBFC banks in India:
The powers of RBI on NBFC banks in India are:
No, the RBI or Reserve Bank of India is not responsible for the administration and functioning of all types of financial institutions in India. Such Financial Institutions are:
Documents required for obtaining NBFC Licence in India are:A company’s incorporation certificate.
Following are the Documents required for obtaining NBFC License in India
The RBI, or Reserve Bank of India, is the concerned authority to impose penalties on NBFCs
The Following listed are the compliances that are required to be complied by an NBFC after obtaining Certificate of Registration (COR)
The list of steps involved in the application for NBFC Registration is given below.
This organization offers financial services to low-income people.
An NBFC bank that has a minimum of 75% of total assets used for infrastructure lending.
NBFC registered for engaging in long-term debt lending for infrastructure projects.
This is an NBFC whose principal business is to carry out the acquisition of securities.
Its principal business is to offer finances for acquiring physical assets.
Unlike Traditional banks, NBFC does not hold a banking license. Listed below are the few types of NBFC banks in India regulated according to the RBI Act, of 1934.
Given below is the list of RBI compliance for NBFC:
With the advancement of Technology, the financial business has taken a new generation by upgrading its business operations and providing various benefits to the Indian economy. Given below are some of the advantages of the Fintech-based NBFC model.
RBI may cancel the application for NBFC registration for the following reasons:
If the NBFC applicant fails to fulfil the mandatory requirement of minimum NOF (Net-Owned Fund).
In case the NBFC fails to operate its business in the public interest.
If NBFC fails to repay the deposit according to the terms and conditions of the depositor.
If NBFC fails to operate its primary business of financial activity.
If the NBFC fails to manage the books of account according to the RBI guidelines.
If the Directors of the applicant fail to meet the criteria according to RBI policies.
An applicant must have a minimum of five years' business plan.
Failure to show appropriate details and identity of the shareholders.
Following are the reasons why one should choose Registernbfc for NBFC Registration
NBFC Clients
Fresh NBFC Registration
Team of CA, CS, Ex-Banker
Cities Served
Customer Service
Customer Score
SLA Delivery
