{"id":5613,"date":"2019-07-20T12:33:49","date_gmt":"2019-07-20T07:03:49","guid":{"rendered":"https:\/\/swaritadvisors.com\/learning\/?p=5613"},"modified":"2021-04-06T17:55:28","modified_gmt":"2021-04-06T12:25:28","slug":"challenges-entrepreneurs-face-while-staring-nbfc-in-india","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/learning\/challenges-entrepreneurs-face-while-staring-nbfc-in-india\/","title":{"rendered":"Challenges faced by Entrepreneurs while Starting an NBFC in India"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Over the past few years, the NBFC in India has undergone a drastic transformation, and the sector has now become a systemically essential component of the financial system. Despite the demonetization in the country, NBFCs have maintained consistent growth. <\/p>\n\n\n\n<p>The contribution of NBFC to the country\u2019s GDP is more than that of the banks. Therefore, we can say that NBFCs are going to be the backbone of the country in the upcoming years. <\/p>\n\n\n\n<div class=\"shadow6\">The Non-Banking Financial Company (NBFC) plays a prominent role in the development of the nation\u2019s core infrastructure, wealth creation, employment generation, transport, and economic growth. Furthermore, it finances the economically weaker sections of the society and the state exchequer.<\/div>\n\n\n\n<p>Hence, starting an NBFC in India could be one of the greatest options entrepreneurs with a high budget can ever opt for. But there are a few challenges that people often face when starting NBFCs. So, firstly, it\u2019s important to discover them and find a way to overcome them. <\/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-6a3b1695a9a8c\" 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-6a3b1695a9a8c\"  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\/learning\/challenges-entrepreneurs-face-while-staring-nbfc-in-india\/#Issues_and_Challenges_in_the_NBFC_Sector\" title=\"Issues\nand Challenges in the NBFC Sector\">Issues\nand Challenges in the NBFC Sector<\/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\/learning\/challenges-entrepreneurs-face-while-staring-nbfc-in-india\/#Funding_issue_due_to_the_absence_of_refinancing_option\" title=\"Funding issue due to the absence of refinancing option\">Funding issue due to the absence of refinancing option<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/learning\/challenges-entrepreneurs-face-while-staring-nbfc-in-india\/#Complication_in_obtaining_NBFC_License\" title=\"Complication in obtaining NBFC License\">Complication in obtaining NBFC License<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/learning\/challenges-entrepreneurs-face-while-staring-nbfc-in-india\/#Difficult_compliances_for_NBFC_in_India\" title=\"Difficult compliances for NBFC in India\">Difficult compliances for NBFC in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/learning\/challenges-entrepreneurs-face-while-staring-nbfc-in-india\/#Absence_of_flexibility_in_the_classification_of_loan_NPAs\" title=\"Absence of flexibility in the classification of loan NPAs\">Absence of flexibility in the classification of loan NPAs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/learning\/challenges-entrepreneurs-face-while-staring-nbfc-in-india\/#Lack_of_statutory_recovery_tool\" title=\"Lack of statutory recovery tool\">Lack of statutory recovery tool<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/learning\/challenges-entrepreneurs-face-while-staring-nbfc-in-india\/#Limited_leverage_ratio_for_NBFCs-ND_with_assets_sizes_less_than_Rs_500_crores\" title=\"Limited leverage ratio for NBFCs-ND with assets sizes less than Rs. 500 crores \">Limited leverage ratio for NBFCs-ND with assets sizes less than Rs. 500 crores <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/swaritadvisors.com\/learning\/challenges-entrepreneurs-face-while-staring-nbfc-in-india\/#Several_representative_bodies\" title=\"Several representative bodies\">Several representative bodies<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/swaritadvisors.com\/learning\/challenges-entrepreneurs-face-while-staring-nbfc-in-india\/#Requirement_of_capacity_building\" title=\"Requirement of capacity building \">Requirement of capacity building <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/swaritadvisors.com\/learning\/challenges-entrepreneurs-face-while-staring-nbfc-in-india\/#Disparate_tax_treatment\" title=\"Disparate tax treatment\">Disparate tax treatment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/swaritadvisors.com\/learning\/challenges-entrepreneurs-face-while-staring-nbfc-in-india\/#Scarcity_of_defaulter_database\" title=\"Scarcity of defaulter database\">Scarcity of defaulter database<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/swaritadvisors.com\/learning\/challenges-entrepreneurs-face-while-staring-nbfc-in-india\/#Removal_of_Priority_Sector_Status_to_Bank_Lending_to_NBFCs\" title=\"Removal of Priority Sector Status to Bank Lending to NBFCs\">Removal of Priority Sector Status to Bank Lending to NBFCs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/swaritadvisors.com\/learning\/challenges-entrepreneurs-face-while-staring-nbfc-in-india\/#Minimum_mandatory_credit_rating_for_deposit-taking_NBFC\" title=\"Minimum mandatory credit rating for deposit-taking NBFC \">Minimum mandatory credit rating for deposit-taking NBFC <\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/swaritadvisors.com\/learning\/challenges-entrepreneurs-face-while-staring-nbfc-in-india\/#Solutions_to_the_above_NBFC_challenges\" title=\"Solutions\nto the above NBFC challenges \">Solutions\nto the above NBFC challenges <\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/swaritadvisors.com\/learning\/challenges-entrepreneurs-face-while-staring-nbfc-in-india\/#Co-Originating_Lending_for_funding_issues\" title=\"Co-Originating Lending for funding issues \">Co-Originating Lending for funding issues <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/swaritadvisors.com\/learning\/challenges-entrepreneurs-face-while-staring-nbfc-in-india\/#Partner_with_Fintech_Players\" title=\"Partner with Fintech Players\">Partner with Fintech Players<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/swaritadvisors.com\/learning\/challenges-entrepreneurs-face-while-staring-nbfc-in-india\/#Business_plan_and_continuous_monitory\" title=\"Business plan and continuous monitory \">Business plan and continuous monitory <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/swaritadvisors.com\/learning\/challenges-entrepreneurs-face-while-staring-nbfc-in-india\/#%E2%80%9CName_and_Shame%E2%80%9D_guarantors_for_loan_defaulters\" title=\"\u201cName and Shame\u201d guarantors for loan defaulters\">\u201cName and Shame\u201d guarantors for loan defaulters<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/swaritadvisors.com\/learning\/challenges-entrepreneurs-face-while-staring-nbfc-in-india\/#Risk_management_framework\" title=\"Risk management framework\">Risk management framework<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/swaritadvisors.com\/learning\/challenges-entrepreneurs-face-while-staring-nbfc-in-india\/#Hire_consultants_for_NBFC_Documentation_License_and_Compliances\" title=\"Hire consultants for NBFC Documentation, License, and Compliances \">Hire consultants for NBFC Documentation, License, and Compliances <\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/swaritadvisors.com\/learning\/challenges-entrepreneurs-face-while-staring-nbfc-in-india\/#Concluding_Thoughts\" title=\"Concluding\nThoughts \">Concluding\nThoughts <\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Issues_and_Challenges_in_the_NBFC_Sector\"><\/span>Issues\nand Challenges in the NBFC Sector<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Even\nthough the NBFC has been capturing market shares and making rapid progress than\nfrom commercial banks, a few prominent players have largely dominated the NBFC\nmarket. Small NBFCs are struggling to ramp-up their operations and lend\nsustainably. <\/p>\n\n\n\n<p>There\nare several factors due to which NBFCs struggle. Some of the major challenges\nand issues in the way of starting an NBFC in India are as follows:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Funding_issue_due_to_the_absence_of_refinancing_option\"><\/span>Funding issue due to the absence of refinancing option<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Banks\nin India have several options for refinancing such as RBI, NABARD, EXIM Bank,\nand SIDBI. Likewise, Housing Financing Companies (HFCs) also have the\nrefinancing alternative, and it refinances from NHB (National Housing Bank),\nthe regulator of HFCs. <\/p>\n\n\n\n<p>However, NBFCs have to hinge on banks, competitors, or the capital markets for raising resources every time. In turn, this could be unfavorable to the sustainability of the NBFCs growth like in the case of distress. Furthermore, the flow of funds from these sources could dry up without much notice. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Complication_in_obtaining_NBFC_License\"><\/span>Complication in obtaining NBFC License<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The process of procuring an Online NBFC license is quite difficult. The reasons for the same are the complicated documentation and approval required from the Reserve Bank of India. RBI governs the process of <a href=\"https:\/\/swaritadvisors.com\/nbfc-registration\" class=\"text-primary\"><strong>NBFC registration<\/strong><\/a> and has set several standards for obtaining the same. <\/p>\n\n\n\n<p>Apart\nfrom the documentation, there are several criteria that an NBFC applicant must\nsatisfy. They are-<\/p>\n\n\n\n<ul><li><strong>Composition of the Board of Directors:<\/strong> It means at least one of the directors of the company should an experienced person with a financial background. For example, he\/she must have worked in the Bank.<\/li><li><strong>Quality of Capital:<\/strong> A net worth of Rs. 2 crores is mandatory to start an NBFC in India which is quite high. However, the most important thing to consider is the quality of capital. Whether it is white money or black. Therefore, thorough verification is done on the source of capital applicant brings.<\/li><li><strong>No Conviction:<\/strong> Another most important thing and the challenge in starting an NBFC in India. The director must not be convicted of any charge. If he\/she is, then the person can\u2019t be the director of the company. <\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Difficult_compliances_for_NBFC_in_India\"><\/span>Difficult compliances for NBFC in India<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Once you have incorporated your NBFC, you need to follow its compliances strictly. There are a number of NBFC compliances for different types of NBFCs which they have to file quarterly, half-yearly, and annually. <\/p>\n\n\n\n<p>Therefore,\nif you are running a company of loan and advances, etc., then it becomes quite\ntough to look at all the things at own. Furthermore, it becomes really\ndifficult to figure out how and when to file the prescribed returns. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Absence_of_flexibility_in_the_classification_of_loan_NPAs\"><\/span>Absence of flexibility in the classification of loan NPAs<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>For\nlarge corporates, the NPA (Non-Performing Assets) norms are quite relevant.\nHowever, businesses with irregular cash flow have a cascading impact regarding\nall the delays in payments. <\/p>\n\n\n\n<p>Although,\nin the revised categorization, assets are re-categorized; therefore,\nclassification under NPA and greater flexibility, w.r.t scheduling is much\nrequired. The classification of NPA norms must be based on the assets financed\ninstead and the borrowers\u2019 profile or uniform system of asset\nclassification.&nbsp; <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Lack_of_statutory_recovery_tool\"><\/span>Lack of statutory recovery tool<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>After\nthe asset classification norms are revised, something which still lacks is the\nrecovery tool at par with banks. However, NBFCs today lack statutory recovery\ntool available. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Limited_leverage_ratio_for_NBFCs-ND_with_assets_sizes_less_than_Rs_500_crores\"><\/span>Limited leverage ratio for NBFCs-ND with assets sizes less than Rs. 500 crores <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Small NBFCs are exempted from the maintenance of the Capital Adequacy Ratio (CRAR). But they can\u2019t exceed the leverage ratio beyond 7 which is quite restrictive. Furthermore, such NBFCs borrow largely from financial institutions and banks which in turn carry out due diligence on the NBFCs that borrow. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Several_representative_bodies\"><\/span>Several representative bodies<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The NBFC sector is at the development stage. Therefore, in the interest of developing its various segments in a harmony, setting a single representative body could be a better alternative. However, one must always ensure that every segment is represented adequately in such an apex body that promotes the balanced growth of the NBFC sector without any inner conflicts. <\/p>\n\n\n\n<p>However, in the present situation, there are a number of representative bodies. For instance, the Finance Industry Development Council for AFCs, Association of Gold Loan Companies for Gold Loan NBFCs, etc. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Requirement_of_capacity_building\"><\/span>Requirement of capacity building <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>NBFCs need to work on creating a receptive ecosystem for capacity building on both a collective and individual basis. And that\u2019s what NBFCs are nowadays lacking and need to work up on. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Disparate_tax_treatment\"><\/span>Disparate tax treatment<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It\u2019s a well-known fact that there exists a big inequality in the tax structures for Banks vs. NBFCs. For example, TDS (Tax deduction at Source), Dual taxation on lease\/hire purchase, and income recognition on NPAs. However, the current legal framework for NBFCs doesn\u2019t allow a tax deduction for the non-performing assets. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Scarcity_of_defaulter_database\"><\/span>Scarcity of defaulter database<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>NBFC doesn\u2019t get defaulter lists from Banks. In turn, this leaves NBFCs susceptible to credit risk on account of the lack of crucial information. Moreover, there is a requirement for bringing the essential legislative amendments so that these companies can leverage the utility payments database in the credit assessment process.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Removal_of_Priority_Sector_Status_to_Bank_Lending_to_NBFCs\"><\/span>Removal of Priority Sector Status to Bank Lending to NBFCs<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It\u2019s one of the biggest issues that NBFCs face. The Priority Sector status to Bank Lending to NBFCs must be stored. Hence, the collaboration model \u201cwholesaler\/retailer\u201d between the NBFCs and Banks ensures the credit flow to under-served sections of the society. This, in turn, helps NBFCs in creating assets and wealth in semi-urban and rural parts of the country. However, RBI could specify a cap to route a maximum of a fixed percentage of the total bank lending priority sector through NBFC. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Minimum_mandatory_credit_rating_for_deposit-taking_NBFC\"><\/span>Minimum mandatory credit rating for deposit-taking NBFC <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>As per the revised regulatory framework, it is obligatory for NBFCs accepting deposits to get investment-grade credit. This will make them eligible for accepting public deposits from any of these six rating agencies- CARE, CRISIL, FITCH Ratings India Pvt. Ltd, ICRA, SMERA, and Brickwork Ratings India Pvt. Ltd. <\/p>\n\n\n\n<p>In\ncase the rating of any NBFC is downgraded to below the minimum investment grade\nrating, then it can\u2019t accept public deposits. Further, it must report the RBI\nregarding its position within fifteen working days. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Solutions_to_the_above_NBFC_challenges\"><\/span>Solutions\nto the above NBFC challenges <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Now\nthat you are have encountered the challenges, here we have provided solutions\nto almost all of them. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Co-Originating_Lending_for_funding_issues\"><\/span>Co-Originating Lending for funding issues <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>With\nthe help of Co-originating lending, the NBFCs can avoid the funding risk and\nsuch several issues. Further, with co-origination, such companies can leverage\ntheir balance sheets which will not only improve their return on equity (ROE)\nbut will also let them provide a better rate and experience to the customer. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Partner_with_Fintech_Players\"><\/span>Partner with Fintech Players<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Fintech companies have always gained promising opportunities and the ability to enhance the capabilities of the lender. Moreover, their offerings are better, faster, and cheaper across several domains such as lending, brokerage, payments, personal finance, and credit scoring. <\/p>\n\n\n\n<p>The Fintech players can help NBFCs significantly drive competitive advantage and boost capabilities in a crowded market. NBFCs partnering with Fintechs can widen their customer database, increase their operational efficiency, etc. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Business_plan_and_continuous_monitory\"><\/span>Business plan and continuous monitory <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>For a beginner company\/NBFC, NPAs are a big hurdle to the organization\u2019s growth. Therefore, even before you start, you require a great <a href=\"https:\/\/swaritadvisors.com\/business-plan\" class=\"text-primary\"><strong>business plan<\/strong><\/a> and need to monitor every activity continuously.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"%E2%80%9CName_and_Shame%E2%80%9D_guarantors_for_loan_defaulters\"><\/span>\u201cName and Shame\u201d guarantors for loan defaulters<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Along with Banks, NBFCs too can join the naming and shaming of wilful loan defaulters. According to bankers, the company needs to publish the name, address, and photographs of the guarantors if they don\u2019t clear the dues within the 15 days of the notice which contains the details of the original borrower. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Risk_management_framework\"><\/span>Risk management framework<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A company, especially a start-up, is always at some kinds of risk. Hence, it\u2019s important for the company to implement a risk management framework. It will aid the organization with a structured process to help the company identify the potential threats to the organization. <\/p>\n\n\n\n<p>Furthermore, it helps the entity to define the strategy and tactic to minimize or eliminate the impact of such risks. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Hire_consultants_for_NBFC_Documentation_License_and_Compliances\"><\/span>Hire consultants for NBFC Documentation, License, and Compliances <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Yes,\nit is that simple. Consultants like Enterslice and Swarit Advisors, which are\nconsidered a brand for NBFC registration and compliances can help NBFC\napplicants to excel in their business.<\/p>\n\n\n\n<p>These consultants have good hands-on tackling every obstacle in the path of NBFC licensing, documentation, and compliances. Dealing with RBI is really difficult but professionals make this easy for you. Hence, you must hire one professional for obtaining NBFC license and complying with the <a href=\"https:\/\/swaritadvisors.com\/nbfc-compliance\" class=\"text-primary\"><strong>compliances of NBFC<\/strong><\/a>. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Concluding_Thoughts\"><\/span>Concluding\nThoughts <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>It\u2019s evident from the above discussion that starting an NBFC is an arduous task. There are several hurdles in the way that entrepreneurs must overcome. Because the process of NBFC registration requires approval from the <strong>RBI<sup><a class=\"text-primary\" href=\"https:\/\/www.rbi.org.in\/\"><strong><em>[1]<\/em><\/strong><\/a><\/sup> <\/strong>, so it becomes hard to acquire the license. Furthermore, the NBFC documentation process is quite complicated. Apart from the licensing, following the compliances of NBFC in India is also a challenging task in itself. <\/p>\n\n\n\n<p>Therefore,\nwe suggest you contact the most trusted professionals in the market for getting\nthe NBFC license. Besides, if you have any queries regarding the NBFC\nregistration process, please leave the comment below. We will get back to you\nvery soon. <\/p>\n\n\n\n<p><b>Also, Read:<\/b> <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/learning\/semi-closed-wallet-license\/\" \"=\"\">Everything you need to know about Semi-Closed Wallet License<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Over the past few years, the NBFC in India has undergone a drastic transformation, and the sector has now become a systemically essential component of the financial system. Despite the demonetization in the country, NBFCs have maintained consistent growth. The contribution of NBFC to the country\u2019s GDP is more than that of the banks. Therefore, [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":5614,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[89],"tags":[1003],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/5613"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/comments?post=5613"}],"version-history":[{"count":42,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/5613\/revisions"}],"predecessor-version":[{"id":18584,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/5613\/revisions\/18584"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media\/5614"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media?parent=5613"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/categories?post=5613"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/tags?post=5613"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}