{"id":3142,"date":"2021-03-09T06:56:13","date_gmt":"2021-03-09T06:56:13","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=3142"},"modified":"2021-03-09T06:59:55","modified_gmt":"2021-03-09T06:59:55","slug":"nbfc-registration-procedure-with-rbi","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/nbfc-registration-procedure-with-rbi\/","title":{"rendered":"NBFC Registration Procedure with RBI &#8211; A Complete Guide"},"content":{"rendered":"\n<p class=\"has-drop-cap\">An NBFC is a financial company which is registered under the Companies Act, 2013 and 1956, and it is involved in the Act of providing loans, advances or acquisition of bonds\/shares\/debentures\/stocks\/securities which are issued by the local authority or the Government. The financial service sectors of India comprises not just commercial banks but also Non-Banking Financial Companies. Non-Banking Financial Companies are vital to the economy, especially in India, where 70% of the Indian population lives in rural areas and has a constant need for long and short-term finance. To establish an NBFC in India, you need to go through the <strong><a class=\"text-primary\" href=\"https:\/\/swaritadvisors.com\/nbfc-registration\">NBFC Registration<\/a><\/strong> procedure with RBI, and a Certificate of Registration can be obtained in 90 to 120 days. In this blog, we discuss the NBFC Registration Procedure with RBI (Reserve Bank of India).<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3aaa14af5d7\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3aaa14af5d7\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/blog\/nbfc-registration-procedure-with-rbi\/#Explain_the_Business_Activity_of_an_NBFC\" title=\"Explain the Business Activity of an NBFC\">Explain the Business Activity of an NBFC<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/blog\/nbfc-registration-procedure-with-rbi\/#Exempted_Companies_from_NBFC_Registration\" title=\"Exempted Companies from NBFC Registration\">Exempted Companies from NBFC Registration<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/blog\/nbfc-registration-procedure-with-rbi\/#Conditions_for_NBFC_Registration_with_NBFC\" title=\"Conditions for NBFC Registration with NBFC\">Conditions for NBFC Registration with NBFC<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/blog\/nbfc-registration-procedure-with-rbi\/#What_are_the_Vital_Documents_required_for_NBFC_Registration_Procedure_with_RBI\" title=\"What are the Vital Documents required for NBFC\nRegistration Procedure with RBI?\">What are the Vital Documents required for NBFC\nRegistration Procedure with RBI?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/blog\/nbfc-registration-procedure-with-rbi\/#What_is_the_NBFC_Registration_Procedure_with_RBI_in_India\" title=\"What is the NBFC Registration Procedure with RBI in India?\">What is the NBFC Registration Procedure with RBI in India?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/blog\/nbfc-registration-procedure-with-rbi\/#Difference_between_NBFCs_and_Banks\" title=\"Difference between NBFCs and Banks\">Difference between NBFCs and Banks<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/blog\/nbfc-registration-procedure-with-rbi\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Explain_the_Business_Activity_of_an_NBFC\"><\/span>Explain the Business Activity of an NBFC<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Non-Banking Financial Companies are proving to be a perfect alternative to commercial banks in India as a vital part of the Indian Financial System (IFS), thus making a fantastic contribution toward the Financial Development of the country. The <a href=\"https:\/\/www.rbi.org.in\/\">RBI<\/a> (Reserve Bank of India) and the Central Government are the primary regulators of the Non-Banking Financial Companies (NBFCs) in India. The unorganized sector looking for advances and loans have been the most vital beneficiary of Non-Banking Financial Companies, providing easy access to the small borrowers.<\/p>\n\n\n\n<p><strong>Also, Read:<\/strong> <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/blog\/challenges-and-opportunities-for-the-future-of-nbfc-in-india\/\">Challenges and Opportunities for the Future of NBFC in India<\/a><\/mark><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Exempted_Companies_from_NBFC_Registration\"><\/span>Exempted Companies from NBFC Registration<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In\nterms of authorities given to the Banks, to remove dual regulation, certain\ncategories of Non-Banking Financial Companies which are controlled by other\nregulators are exempted from the prerequisite of registration with RBI, which\nare as follow:<\/p>\n\n\n\n<ul><li>Chit Fund Companies.<\/li><li>Stock Exchanges.<\/li><li><strong><a href=\"https:\/\/swaritadvisors.com\/nidhi-company-registration\" class=\"text-primary\">Nidhi Companies<\/a><\/strong>.<\/li><li>Housing Finance Companies.<\/li><li>Insurance Companies.<\/li><li>Venture Capital Fund Companies.<\/li><li>Merchant Banking Companies.<\/li><li>Companies involved in the\nbusiness of sub-broking or stock-broking.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conditions_for_NBFC_Registration_with_NBFC\"><\/span>Conditions for NBFC Registration with NBFC<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The\napplication of Non-Banking Financial Company (NBFC) shall comply with the\nfollowing conditions:<\/p>\n\n\n\n<ul><li>As per the Companies Act, 2013\nand Companies Act, 1956, the applicant must be a registered company.<\/li><li>The company shall involve in\nthe financial activities stated in the Act. If the financial flow of such a\nbusiness grows more than 50% of the company&#8217;s total capital asset, such a\ncompany will get an NBFC Registration Certificate.<\/li><li>When the applicant company is\nmaking an application for the registration of NBFC shall hold a minimum Paid Up\ncapital fund of Rs. 2 crores. Simultaneously, the Foreign Investor and Company\nwho wants to set Non-Banking Financial Company shall have paid-up capital of\nRs. 5 crores.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Vital_Documents_required_for_NBFC_Registration_Procedure_with_RBI\"><\/span>What are the Vital Documents required for NBFC\nRegistration Procedure with RBI?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following\nare some vital documents required at the time of NBFC Registration Procedure\nwith RBI (Reserve Bank of India):<\/p>\n\n\n\n<ul><li>Submit a certified copy of COI\nor Certificate of Incorporation.<\/li><li>Submit certified copies of\nextract of the main object clause in the MOA or Memorandum of Association\nrelating to financial business.<\/li><li>If any company is already\nregistered, submit the audited balance sheet, P&amp;L Account (Profit and Loss)\nwith the director and auditor&#8217;s report.<\/li><li>Banker\u2019s Report.<\/li><li>Submit Board Resolution\ndeclaring the following:<\/li><\/ul>\n\n\n\n<ol><li>The company is not carrying on\nany Non-Banking Financial Company (NBFC) activity and will not begin the same\nbefore obtaining NBFC Registration from RBI.<\/li><li>The company has articulated the\n<strong>&#8220;Fair Practices Code&#8221;<\/strong>as per the RBI Guidelines.<\/li><li>The company cannot accept any\npublic funds as of the date and will not accept the same in the future without\ngetting approval from RBI.<\/li><li>The company doesn&#8217;t have any\ncustomer interface as of the date and will not have the same in the future\nwithout any approval of RBI (Reserve Bank of India).<\/li><\/ol>\n\n\n\n<ul><li>Submit a copy of FD receipt\n(Fixed Deposit) and Banker\u2019s certificate of no lien representing balances\nsupporting NOF (Net Owned Fund).<\/li><li>Banker&#8217;s report of the\napplicant&#8217;s company, it is an associate\/related parties\/group\/holding companies\/related\nparties, directors of the company having considerable interest in some other\ncompanies. The Banker&#8217;s report should be about the dealings of these companies\nwith these Banker as a depositing company or a borrowing company.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_NBFC_Registration_Procedure_with_RBI_in_India\"><\/span><strong>What is the NBFC Registration Procedure with RBI in India?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following\nare the steps of NBFC Registration Procedure with RBI:<\/p>\n\n\n\n<ul><li>The applicant needs to file an\napplication online at the official website of RBI (Reserve Bank of India).<\/li><li>Once you fill the application\nform online, take a print out of it and submit the same along with all the\nvital documents mentioned above to the Regional Office of the RBI.<\/li><li>To apply for COSMOS, the\ncompany shall click on <strong>the &#8220;Click&#8221;<\/strong>\nbutton on the login page.<\/li><li>After clicking the button, one excel\nsheet will open on your window screen. The applicant shall download the\napplication.<\/li><li>The company may indicate the\nright name of the Regional Office in the field <strong>\u201cC-8\u201d<\/strong> of the <strong>\u201cAnnex-I Identification\nParticulars\u201d<\/strong>in the excel\napplication form.<\/li><li>After submitting, the company\nwill get a CARN (Company Application Reference Number) for the COR application\nfiled online.<\/li><li>Then the company has to submit\nthe hard copy of the form along with the vital documents to the respective\nRegional Office.<\/li><li>The company can check the\napplication form status online by entering the acknowledgement number.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Difference_between_NBFCs_and_Banks\"><\/span>Difference between NBFCs and Banks<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Both\nare the financial intermediaries; NBFCs (Non-Banking Financial Companies) are\nregistered under the Companies Act, 2013, whereas the Banks are regulated by\nthe Banking Regulation Act and Companies Act. The lower costs in founding NBFC\nmake it a more profitable option as compared to banks. The Reserve Bank of\nIndia (RBI) governed both financial intermediaries.<\/p>\n\n\n\n<p>Following\nare some activities that are not allowed by a Non-Banking Financial Company:<\/p>\n\n\n\n<ul><li>NBFCs cannot accept DDs or\nDemand Deposits.<\/li><li>Non-Banking Financial Companies\ncannot issue cheques drawn themselves since they don&#8217;t form any part of the\npayment and settlement system.<\/li><li>In the case of Non-Banking\nFinancial Company, deposit insurance facility and credit guarantee corporation\nis not available to depositors.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The NBFC Registration procedure with RBI has been simplified by the end of 2016. Non-Banking Financial Companies have begun as the largest receiver and lender of the NOFs due to their access to even the country&#8217;s remote areas. Non-Banking Financial Companies are expected to quicken the growth of the country&#8217;s economy. The Reserve Bank of India is also continuously endeavouring to provide regulatory support to the segment and ensure financial stability in the long run.<\/p>\n\n\n\n<p><strong>Also, Read:<\/strong> <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/blog\/documents-required-for-nbfc-registration\/\">What are the Vital Documents Required for NBFC Registration?<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>An NBFC is a financial company which is registered under the Companies Act, 2013 and 1956, and it is involved in the Act of providing loans, advances or acquisition of bonds\/shares\/debentures\/stocks\/securities which are issued by the local authority or the Government. The financial service sectors of India comprises not just commercial banks but also Non-Banking [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":3143,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[58,56],"tags":[476],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/3142"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=3142"}],"version-history":[{"count":8,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/3142\/revisions"}],"predecessor-version":[{"id":3151,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/3142\/revisions\/3151"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/3143"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=3142"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=3142"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=3142"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}