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Procedure for Applying for NBFC (Non Banking Financial Company)

Procedure for Applying for NBFC (Non Banking Financial Company)
Swarit Advisors
| Updated: Jun 28, 2018 | Category: NBFC

An NBFC is a short abbreviation used for non banking financial company. These are a kind of financial institutions that provide banking-like facilities and other lending services without having to meet any legal definitions of a bank. In general, these kinds of institutions are not allowed to take any sort of deposits from the public. But then this factor keeps these non banking financial company out of the scope of the traditional oversight needed under the regulations of banking.

The banking services such as the loans and the credit facilities, the plans of retirement, money markets, the merger activities, and underwriting are offered by the non-banking financial company.

Each of the non-banking financial company must compulsorily obtain commencement of their business certificate from the reserve bank of India. It is well defined under section 45 IA of the reserve bank of India RBI act. Also, the non-banking financial company won’t at all commence its business of non-banking financial institution[1] without obtaining an NBFC Registration certificate. This certificate is issued by the reserve bank of India.

The NBFC Registration certificate or an NBFC license can easily be obtained mostly within the time span of 90 days to 120 days which is about 3 to 4 months.

The gap between the financial needs for organized and the unorganized sections of the population is filling up slowly. And in recent times, the commercial banks are targeting the big houses of commercialization and the individuals with excellent ratings of credit as their prime customers. And this then provides the non-banking financial company with the opportunity of enlarging their presence in the market of finances.

Types of NBFC are Classified into the following.

  • An asset finance company
  • An investment company
  • Loan company
  • The company of the infrastructure finance.
  • Core Investment company
  • Indian Microfinance company
  • Mortgage guarantee giving company.
  • Finance housing company.
  • On the basis of deposits that they hold, a non-banking financial company can be further classified into two more categories.
  • The deposit accepting non-banking financial company.
  • Non-deposit accepting non-banking financial company.
  • On the basis of size or the minimum capital requirement, the non banking financial company can be divided into the following two categories-
    • The systematically important non banking financial company
    • Non-deposit holding non-banking financial company.

 Procedure of Registering Non-Banking Financial Company

Any particular entity that wants to commence business as a registered non-banking financial company is supposed to apply to the Reserve Bank of India for NBFC Registration. To get it though, they must fulfill the following norms:-

  • Must be a company incorporated under the companies act 2013.
  • Must have net owned funds of Rs 2 crores.
  • File for an online NBFC Registration on the Reserve Bank of India website COSMOS.
  • Submit the hard copy of your application attached with necessary listed documents. All to be submitted to the Reserve Bank of India office.
  • Eventually, after careful inspection and examination of your provided details, you will be granted with the NBFC Registration

Here is the simple procedure that we have shared with you if you need any help then get in touch with Swarit Advisors. We are the leading online legal service provider firm who are always dedicated to helping our customers in whatever way possible. Drop us an email or call us on our phone number mentioned on the website so that we can provide reliable help & support at your end as soon as possible. We will feel glad to serve you in the best ways.

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