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What do you need to know about NBFC Registration Services In India?

Author: Gaurav Bansal
by Gaurav Bansal
Posted: Mar 28, 2017
nbfc registration

Nonbanking Financial Company abbreviated as ‘NBFC’ which the involves principle business of lending, investment in shares/ debentures/stocks/bonds/, leasing, hire purchase, Insurance Business, Chit Business or receiving any other form of deposit under any scheme or arrangement. It is the form of company registered Companies Act, 1956. NBFCs are governed by Reserve Bank of India. NBFCs has emerged as important part of the financial system.

  • NBFC’s cannot accept demand deposit
  • NBFC’s cannot issue cheque drawn
  • Bank deposit is insured by the Deposit Insurance and Credit Guarantee corporation.

Non-Banking Financial Companies are categorized into many types such as

  • Asset finance company
  • Loan Company
  • Infrastructure Finance Company
  • Infrastructure debt fund
  • Investment Company and much more.

The promoters of a company must have knowledge about the different NBFC licenses before applying for the license. Company should be registered with RBI and have a minimum net owned fund of Rs 2 crore to conduct any activities of NBFCs. Company has to submit an application in the prescribed format alongside the required documents for registration

Reserve Bank of India has decided to put the process of NBFC registration easier by reducing the document requirements. In a case where companies are intending to raise public funds in that case companies are required to take separate approvals. CCV provides legal and supportive services for NBFC Registration.

NBFC Registration in India

NBFC Registration number has been compulsory by RBI in specified areas. Proper and Secure Registration should obtain following are the points to be

The applicant Company must register as per rules and regulations and provisions are given in the Companies act, 2013. or Companies act,1956.

Company must be engaged in form of Business mentioned above. In case the company financial Business Flows gets more than 50 % the total capital asset of the company in the year. In that case getting the NBFC certificate is mandatory. The Concerned company must hold the paid capital of Rs. 2 Crore.

Financial Companies Not Regulated by RBI

RBI supervises and regulates the Companies which are engaged in Financial Activities as their principal Business. Company which has financial assets and derives more than 50 % of its gross income from such assets is called NBFC and regulated by RBI. Insurance Companies are regulated by Insurance Regulatory Development Authority(IRDA), Merchant Banking Companies Security Exchange Board of India(SEBI), Finance Companies are regulated by Venture Capital Companies, Mutual funds, and National Housing Bank. Nidhi companies are regulated by Department of Company Affairs and Chit Fund companies are regulated by State Government.

Penalties for Deposit Taking without Authorization

In case any unincorporated entity or unauthorized NBFC found accepting public deposits is liable for criminal action. NBFCs associate themselves with proprietorship or Partnership of contravention with RBI act. These are also prosecuted under the criminal law under the protection interest of depositors.

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  • gauravkr  -  7 months ago

    Nidhi means finance or fund. A Company incorporated with the objective of developing the habit of saving and service funds among members and also receiving deposits and lending of its members. Nidhi Company is also known as Mutual Benefit Finance Company or Nidhi Bank. Starting a Nidhi company! is one of the best options for people who want to commence a finance business with low capital investment.

Author: Gaurav Bansal

Gaurav Bansal


Member since: Feb 16, 2016
Published articles: 19

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