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All you need to know about NBFC Registration in India?

NBFC Registration in India & types
Monisha Chaudhary
| Updated: Jun 12, 2018 | Category: NBFC

NBFC stands for “Non- Banking Financial Company”. It provides similar services to banking like lending money, but the company doesn’t require to meet any legal stipulation of the bank. An NBFC company is incorporated under the Companies Act, 2013, thus every NBFC must get a commencement of business certificate from the Reserve Bank of India. It is defined under section 45 1(a) for the RBI Act.

An NBFC can not carry out its business without obtaining the registration certificate which is issued by the Reserve Bank of India. The process of NBFC registration or NBFC license takes about 90 to 120 days. In this article, we’ll explore what is an NBFC  along with its functions and  registration process.

Main Purpose of NBFC Registration in India

The main objective of an NBFC is to provide loans and advances, shares and debentures and similar things like stocks that are issued by the government or other local authorities, leasing, business insurance and hire purchases etc.

Any financial institution that is incorporated under the Companies Act and has the main principal business of receiving deposits under the schemes or arrangements in a lump sum or installment units is referred as Non-Banking Financial Company or an NBFC.

Types of Companies of NBFCs in India.

Following are some of the categories:-

  • An assist finance company
  • The loan company
  • An Investment company
  • A core Investment company
  • An Infrastructure finance company
  • A Mortgage Guarantee company
  • A Housing finance company
  • A Microfinance company.

By the deposits that they hold, the non-banking financial company could be further classified in two more categories.

  • The non-banking financial company which accepts the deposits.
  • The non-banking financial company that does not accept deposits.

By the size of the minimum capital required for the non-banking financial company, it is classified into the following categories.

  • A Non-banking financial company that is systematically important
  • And the non-banking financial company that is not systematically important.

Online NBFC Registration Procedure in India

An entity that wants to commence a business of the non-banking financial company would need to undertake an NBFC registration procedure. To get an NBFC online registration, you will have to apply to the Reserve Bank of India for the certificate or license.

They must fulfill the following norms:-

  • It must be a company that is incorporated under the company’s act of 2013[1].
  • The company applying for NBFC registration should have a minimum net owned funds of INR 2 crores.
  • The online application on the RBI website (COSMOS) is available where you can apply for NBFC registration.
  • You are supposed to submit a hard copy of the application for online NBFC registration along with the attachments of documents to the RBI office.
  • You will be granted a license only after you are vigilantly inspected for providing correct information and documents.

Feel free to contact the specialists of Swarit Advisors anytime whenever you need, as we have years of experience in handling the online legal process in a quick way. Swarit Advisors is the leading firm which serves its customers by offering legal online registrations related to the government.

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Monisha Chaudhary

Experienced Legal and Advisory professional with 5+ years of workings in the field of compliance, statutory governance and licensing, RBI, IRDAI matters etc.

Top rated CA Service provider

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