Eligibility Norms to Start a NBFC Business


Presentation Description

NBFC registrations are often a cumbersome process when there is no guidance. Educate yourself, understand the nbfc registration process, and get necessary nbfc compliances done. For more information visit - https://www.muds.co.in/nbfc-registration/


Presentation Transcript

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Eligibility Norms to Start a Business

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‘N BFCs’ Non-Banking Financial Companies NBFC do not fall in the legal definition of Banks but they proffer banking facilities and financial services. It is a well-known fact that Banks are not able to cater to the financial needs of all Indians however hard they try therefore more andmorecompaniesareapplyingforNBFCRegistration. The functioning of NBFCs is regulated and monitored by the RBI in compliance with the provisions mentioned in Chapter III B of the RBI Actof1934. The segments which are largely served by the NBFCs are instruments of the capital and money markets such as stocks bonds along with hire-purchasing deposits leasing insurance business investment fundsandchitbusinessandmanymoresimilar activities.

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Services Services NBFCs Can Offer The business activities of NBFCs include loans advances acquisition of shares or stocks or bonds or debentures or securities that are issued by govt or local authority or other marketable securities of similar nature like leasing hire-purchase insurance business chit businessetc. Services NBFCs Cannot Offer: RBI clearly defines the domains which cannot be touched by the NBFCs and thus agriculture activity industrial activity purchase or saleofanygoodsotherthansecurities orprovidinganyservicessale or purchase or construction of the immovable property cannot be dealtwithbyNBFCs.

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Eligibility Norms ▪ Company should be registered under the Companies Act 2013 or CompaniesAct1956 ▪ CompanyshouldhaveMinimumNetOwnedFundofINR2crore Net Owned Funds to be calculated on the basis of the last audited balancesheetoftheCompany

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T ypes of NBFCs Based On The Nature of Activity ▪ MortgageGuaranteeCompany ▪ AssetFinanceCompany ▪ MicrofinanceCompany ▪ InfrastructureFinanceCompany ▪ HousingFinanceCompany ▪ InvestmentCompany ▪ LoanCompany ▪ CoreInvestment Company

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Decode the Procedure Of NBFC Registration ▪ First formality is forming a company with Minimum Net Owned Fund of INR 2 croreEquityShareCapitalnotPreferenceShareCapital. ▪ Then the company needs to open a Bank Account and keep the entire sum of INR2croresina ban k’ sdepositaccountwhichshouldbefreefromallliens. ▪ The Applicant company is then required to file an online application on the R BI’ s website. ▪ Afterthe submission the applicant will get a reference number that shallenable tofacilitate inquiryinthefuture. ▪ Thereafter the company needs to submit the hard copies of the required documentstotheconcernedRegionalOfficeofRBI. ▪ The Regional Office will verify the accuracy of all submitted documents and on satisfaction it will forward the application for NBFC registration to the central office. ▪ The central office of RBI grants the NBFC registration only after the applicant fulfilsallprescribedrequirements insection45-IAofitsactof1934.

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“NBF Cs have become the driving force of the Indian economy their USP being versatility and flexibility which helps them to penetrate all corners of the c oun tr y ” -ShwetaGuptaFounderandCEOMUDS For more information visit: https://www.muds.co.in/nbfc- registration/

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