What is NBFC?

NBFC is a non-banking financial company registered under the Companies Act 2013, engaged in the business of granting loans, advances, Marketplace lending or financial service provider, or other business objectives. The NBFC Registration done by those companies who involved in the financial business by providing financial & Non-financial services to businesses. Do you know NBFCs can’t provide interest rates greater than the ceiling rate prescribed by RBI from time to time?

The Reserve Bank has been given the powers under the RBI Act 1934 to register, lay down policy, issue instructions, inspect, regulate, manage and exercise surveillance over NBFCs that fulfill the 50–50 standards of principal business. The Reserve Bank can penalize NBFCs for violating the provisions of the RBI Act or the directions or orders issued by RBI under the RBI Act.

NBFC Registration Process

  1. Register the company under the Companies Act 2013
  2. The company’s net owned funds should be at least Rs. 2 crores.
  3. There should be at least 1 director in the company from the core banking background.
  4. Good CIBIL score is required
  5. Fill the application form on the RBI website ie on COSMOS website. Apply for online registration and meanwhile deposit a physical copy of the application to the Reserve Bank of India.
  6. Download the excel form detailing what all documents need to filed and upload on the website. The correct name of the Regional Office in the column or row ie, “C-8” of the “Annex-I identification Particulars” in the Excel application form needs to be quoted correctly.
  7. Submit all documents or you can connect with corpseed team for NBFC Registration.
  8. After submission, a CARN number will be generated. When the application filed online. Send the physical copy to the regional branch of RBI.
  9. If after viewing of application all documents are correct then License will be issued to the company. Acknowledgment number will be issued…

NBFC Registration is not mandatory for all NBFCs. The following companies are exempted:

  1. Core Investment Companies — ( with assets less than INR 100 crore or privately funded)
  2. Merchant Banking Companies
  3. Stock-brokers
  4. Housing Finance Companies
  5. Venture Capital firms
  6. Insurance companies
  7. Chit Fund Companies
  8. Nidhi Companies

Source: NBFC Registration Guidelines