{"id":3213,"date":"2021-03-11T07:07:08","date_gmt":"2021-03-11T07:07:08","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=3213"},"modified":"2021-03-11T07:07:10","modified_gmt":"2021-03-11T07:07:10","slug":"prerequisites-of-nbfc-registration","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/prerequisites-of-nbfc-registration\/","title":{"rendered":"Prerequisites of NBFC Registration in India \u2013 An Overview"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Non-Banking\nFinancial Companies or NBFCs are one of the primary contributors to the GDP\n(Gross Domestic Product) from the financial sector. Now the process of NBFC\nRegistration is easy and very simplistic to perform. Non-Banking Financial\nCompanies are legal, financial companies under RBI regulations, which provide\nadvances, loans or credit facilities to the customers. Even though all the\nNon-Banking Financial Companies (NBFCs) are governed by the Reserve Bank of\nIndia (RBI), they are separate entities from regular banks. The process of <strong><a href=\"https:\/\/swaritadvisors.com\/nbfc-registration\" class=\"text-primary\">NBFC Registration<\/a><\/strong>\nis not very complicated and can be registered with MCA (Ministry of Corporate\nAffairs) prior to approval from RBI (Reserve Bank of India). Scroll down to\ncheck the list of all prerequisites of NBFC Registration in 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-6a37529f37a56\" 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-6a37529f37a56\"  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\/prerequisites-of-nbfc-registration\/#What_is_the_list_of_Prerequisites_of_NBFC_Registration\" title=\"What is the list of Prerequisites of NBFC Registration?\">What is the list of Prerequisites of NBFC Registration?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/blog\/prerequisites-of-nbfc-registration\/#Vital_Documents_Required_for_NBFC_License\" title=\"Vital Documents Required for NBFC License\">Vital Documents Required for NBFC License<\/a><\/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\/prerequisites-of-nbfc-registration\/#Registration_Fees_of_NBFC\" title=\"Registration Fees of NBFC\">Registration Fees of 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\/prerequisites-of-nbfc-registration\/#What_are_the_Guidelines_by_RBI_concerning_the_NBFCs_Code_of_Conduct\" title=\"What are the Guidelines by RBI concerning the NBFCs Code of Conduct?\">What are the Guidelines by RBI concerning the NBFCs Code of Conduct?<\/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\/prerequisites-of-nbfc-registration\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_list_of_Prerequisites_of_NBFC_Registration\"><\/span>What is the list of Prerequisites of NBFC Registration?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There\nare some requirements and prerequisites of NBFC Registration in India that\nshould be fulfilled to register with the Ministry of Corporate Affairs. Below\nyou can check the list of prerequisites of NBFC Registration in India:<\/p>\n\n\n\n<ul><li>The institution should be registered under the\nCompanies Act 2013 and must follow all the ROC (Registrar of Companies)\nCompliances.<\/li><li>The company&#8217;s Net Owned Funds (NOF) should be\nRs. 2 crores or more.<\/li><li>At least one director of the company should have\nexperience in an NBFC or banking sector.<\/li><li>CIBIL score of all the directors should be above\n800.<\/li><li>The company should have a detailed understanding\nof <a href=\"https:\/\/www.rbi.org.in\/\">RBI<\/a> Regulations, Disclosures, NBFC\nBusiness, <strong><a href=\"https:\/\/swaritadvisors.com\/nbfc-compliance\" class=\"text-primary\">NBFC Compliances<\/a><\/strong>, and\nTaxation, for example, Obligation under PML Rule.<\/li><\/ul>\n\n\n\n<p>All the\nabove-mentioned prerequisites of NBFC Registration procedure are enough.To get\nan NBFC License, an application has to be filed online and offline. In addition\nto the prerequisites of NBFC Registration from the Reserve Bank of India\nrequires a complete list of documents.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Vital_Documents_Required_for_NBFC_License\"><\/span>Vital Documents Required for NBFC License<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following\nis the list of all the vital documents required for obtaining NBFC License:<\/p>\n\n\n\n<ul><li>In case of a company, submit the certified\ncopies of COI (Certificate of Incorporation) and Certificate of Commencement of\nbusiness.<\/li><li>Submit the certified copies of Memorandum of\nAssociation (MOA) of the company;<\/li><li>Submit the certified copies of the Articles of\nAssociation (AOA) of the company.<\/li><li>Submit a copy of PAN Card and CIN (Corporate\nIdentification Number) allotted to the company.<\/li><li>Submit CIBIL report of the company\u2019s director.<\/li><li>Profiles of the director duly signed by each\ndirector of the company.<\/li><li>CIBIL report of all the directors of the\ncompany.<\/li><li>Submit the last two years of financial\nstatements of Independent Bodies, if any, in the group where all the directors\nmay be holding directorship with or without substantial interest.<\/li><li>Submit a copy of Board Resolution indicating the\nformulation of <strong><em>\u201cFair Practices Code\u201d<\/em><\/strong>.<\/li><li>Board Resolution approving the submission of the\napplication and its authorizing signatory and contents.<\/li><li>Submit a copy of FD or Fixed Deposit receipt and\nbankers certificate of &#8220;No Lien&#8221; representing balances supporting\nNOFs (Net Owned Funds).<\/li><li>Details of the Bank Accounts\/Bank Balances\/ full\npostal address of the bank, credit or loan facilities, etc. availed.<\/li><li>Statutory Auditors Certificate stating that the\ncompany is not carrying on any NBFC activity.<\/li><li>Details of Authorized Share Capital and the\nlatest shareholding pattern of the company.<\/li><li>Self-attested bank statements and <strong><a href=\"https:\/\/swaritadvisors.com\/income-tax-return-filing\" class=\"text-primary\">Income Tax Returns<\/a><\/strong>\n(ITR) etc.<\/li><li>Submit a copy of the documentary evidence that\nvalidates the company\u2019s source of the start-up capital.<\/li><li>Next year years of all the documents showing the\ncompany\u2019s plans surrounding the following elements:<\/li><\/ul>\n\n\n\n<ol><li>Business Thrust.<\/li><li>Market Segment.<\/li><li>Cash Flow Statement.<\/li><li>Asset or Income Pattern Statement.<\/li><li>Projected Balance Sheets.<\/li><\/ol>\n\n\n\n<ul><li>Submit a copy of the previous three years of\naudited balance sheet and Profit &amp; Loss account accompanied by auditors and\ndirectors report.<\/li><li>Board Resolution declaring that the company is\nnot carrying on any Non-Banking Financial Company activity and will not\ncommence any activity before getting NBFC Registration from the Reserve Bank of\nIndia.<\/li><li>Statutory Auditors Certificate declaring Net\nOwned Fund (NOF) as on date of the application.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Registration_Fees_of_NBFC\"><\/span>Registration Fees of NBFC<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The\nRegistration fee of NBFC includes many expenses, and below is the\nclassification of the fees structure for NBFC Registration:<\/p>\n\n\n\n<ul><li>An applicant needs to pay a fee to the Ministry of Corporate Affairs (MCA), and this fee is based on the authorized capital of the company.<\/li><li>The fee structure for NBFC Registration also includes the expenses for Articles of Association (AOA) and Memorandum of Association (MOA) of the company.<\/li><li>A specific amount of fees is also payable concerning <strong>Simplified Proforma<\/strong> for digitally incorporating company (SPICe+).<\/li><li>Every company&#8217;s director needs to provide a DSC or Digital Signature Certificate; thus, its generation subjected to payment of periodic fees.<\/li><li>Extra fees must go along with the application to the registrar.<\/li><li>For DIN or Director Identification Number, a fixedfee has to be paid to the Ministry of Corporate Affairs (MCA).<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Guidelines_by_RBI_concerning_the_NBFCs_Code_of_Conduct\"><\/span>What are the Guidelines by RBI concerning the NBFCs Code of Conduct?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>The RBI does not support the NBFC\u2019s Code of Conduct regarding amount repayment.<\/li><li>Based on RBI guidelines, the company offer the rate of interest.<\/li><li>The company must enable the submission of the balance sheet every year.<\/li><li>Public Deposit of Rs. 20 crores or more.<\/li><li>The Public Deposit\u2019s limitation in the form of Liquid Assets should stay at 15%.<\/li><li>Non-Banking Financial Companies cannot offer extra benefits, incentives to the customers or depositors like conventional banks.<\/li><li>The half-yearly ALM return is mandatory to be submitted by the companies who hold.<\/li><li>Under no circumstances, the depositors of Non-Banking Financial Companies benefit from the protection of <strong>DICGC (Deposit Insurance and Credit Guarantee Corporation)<\/strong>.<\/li><li>Only those non-Banking Financial Companies can accept conditional deposits from public depositors who have a <strong>Minimum Investment Grade Credit<\/strong>.<\/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>There is no disagreeing that Non-Banking Financial Companies are playing an essential role in the financial sector, and these financial companies are way better than the conventional banking policy and code of conduct. The company searching for NBFC Registration must know all the prerequisites of NBFC Registration. All the information provided in this blog gives a clear idea about what it takes to gain an NBFC Registration Certificate from the respective authority.<\/p>\n\n\n\n<p><strong>Also, Read: <\/strong><mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/blog\/nbfc-registration-procedure-with-rbi\/\">NBFC Registration Procedure with RBI \u2013 A Complete Guide<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Non-Banking Financial Companies or NBFCs are one of the primary contributors to the GDP (Gross Domestic Product) from the financial sector. Now the process of NBFC Registration is easy and very simplistic to perform. Non-Banking Financial Companies are legal, financial companies under RBI regulations, which provide advances, loans or credit facilities to the customers. Even [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":3214,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[58,56],"tags":[483],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/3213"}],"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=3213"}],"version-history":[{"count":3,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/3213\/revisions"}],"predecessor-version":[{"id":3217,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/3213\/revisions\/3217"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/3214"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=3213"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=3213"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=3213"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}