Quick Tips Regarding Nbfc Registration

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NBFC is becoming increasingly popular and economically stable in recent years; nevertheless, we must first understand what an NBFC is and what benefits it provides to business owners.  We must first understand the NBFC concept. As a result, NBFC stands for non banking financial company. Non-banking financial companies provide a variety of services that are linked to banks, such as loans, deposits, and financial assistance. In Details A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 that engages in the business of loans and advances, the acquisition of shares/stocks/bonds/debentures/securities issued by the government or a local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, and chit business, but does not include any institution whose principal business is the provision of financial services.

Types Of Non-Banking Financial Company ( NBFC )

Based on Liabilities:

  • Deposit Taking
  • Non – Deposit Taking

NBFC Based on the type of the Activity

  • NBFC – Infrastructure Debt Fund (IDF)
  • NBFC – Micro Finance Institution (MFI)
  • NBFC – Mortgage Guarantee Companies (MGC)
  • NBFC – Non-Operating Holding Finance Company (NOHFC)
  • NBFC – Investment and credit Company(ICC)
  • NBFC – Infrastructure Finance Company (IFC)
  • NBFC – Asset Finance Company (AFC)
  • NBFC – Core investment Company (CIC)

NBFC Registration

Further, Non Deposit taking NBFC has been divided into the following:

  • NBFC – ND Systemically Important
  • NBFC – ND Non – Systemically important

Quick Tips Regarding Nbfc Registration

  • Documents confirming the highest level of education held by the company’s directors.
  • The shareholders’, companies, and directors’ net worth certificates must all be CA certified.
  • The company must be registered as either a Public Limited or a Private Limited Company.
  • The MOA should include an explicit clause detailing the company’s financial or investment situation.
  • It is critical to have certified paperwork from the different regional registrar of businesses for the certification of incorporation, MOA, and AOA.
  • Document proving the income of the company’s shareholders, founders, and directors, as well as their KYC.
  • Having a Banker Report with a No Lien remark on the Rs 2 Cr initial final deposit.
  • An experienced NBFC Consultant is required by a company.
  • Providing the profile of one of the directors who has 10+ years of financial expertise as a Senior Management in a bank or NBFC.
  • It is critical to have the directors’ and shareholders’ credit reports confirmed, as this prevents them from repaying the loan or financial facilities over time. The RBI may accept the application for the extension if the reason for the delay is properly explained.
  • The Rs. 2 crore initial capital cannot be a borrowed capital.
  • In order to get through the NBFC licensing procedure, you’ll need a high-level business strategy.
  • A thorough action plan for lending products and the Credit & Risk Assessment Policy should be in place.
  • A complex decision-making process as well as an organizational framework for approving or rejecting a loan application.
  • Having a certificate issued of the audited balance sheet with profit and loss account, as well as the auditor’s report from the previous three years of ownership. If the application is a subsidiary of a Public Limited, Private Limited, or Foreign Company, this is required.
  • All essential FDI Compliance as per the FEMA Act must be compiled in the case of an FDI.

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