What is NBFC registration?

A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 2013 which is engaged in the business of loans and advances, acquisition of shares/ bonds/ stocks/securities/debentures issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, chit business, insurance business but does not include any institution whose principal business is that of industrial activity, agriculture activity, sale or purchase of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property. NBFCs are those companies which are not a proper uniform bank and don't hold a banking license, but provide a variety of helpful and supportive services to borrower, investors and public deposits in selected sectors of business.

The most preferred are for NBFC registration is finance and leasing, investment fund, hire-purchase, insurance business, an instrument of capital and money market, commercial and industrial loans & advances, deposits, etc.

NBFCs in India are Generally Registered in Three Different Forms

Asset Finance Companies (AFC)

An Asset Finance Company is a financial institution which carries on principal business of financing of physical assets such as automobiles, lathe machines, tractors, earth moving and material handling equipment's, generator sets, moving on own power and general purpose industrial machines.

Loan Companies (LCs)

Loan Company is a financial institution carrying on its principal business the providing of finance whether by making loans or advances or otherwise, for any activity other than its own but does not include an Asset Finance Company.

Investment Companies (ICs)

An Investment Company is a financial institution carrying on as its principal business the acquisition of securities. You can do NBFC registration in any of these forms depending upon your choice of business.

NBFC Registration Process

NBFCs are very supportive and prominent, and are broadly classified into three categories

1. Asset finance companies.

2. Loan companies.

3. The investment companies.

For seeking registration under the category of a non-banking financial company from the Reserve Bank of India, the aspirant company needs to have a total paid up capital of Rs. 2 Crore. The company needs to be registered properly under the Companies Act, 2013, and it should deal with matters and transactions in any of the above-mentioned categories. After the company registration process is complete, the company is mandatorily required to open a Fixed Deposit of Rs. 2 crores and is also required to apply for an NBFC registration certificate to the Reserve Bank of India. The NBFC registration is done by prosecuting for brisk registration, after submitting the prescribed application form together with all necessary documents to the Reserve Bank of India. If the apex bank is satisfied that all the conditions and requirements mentioned in the Section 45-IA of the RBI Act of 1934, are fully complied by the company, then the Reserve Bank of India grants NBFC registration certificate to the applicant company. The NBFC is eligible to accept public deposits after the Certificate of NBFC registration is granted to it by the apex bank.

To accept public deposits, NBFCs should follow all the terms and conditions, and rules and regulations prescribed in the Non-Banking Financial Companies Acceptance of Public Deposits Directions, 1998.


Documents Required NBFC Registration

From Directors Documents

  • Identity proof (Copy of Pan Card) of proposed directors.
  • Address Proof (Bank Statement/Aadhar Card/Voter ID Card) of proposed directors.
  • Passport sized photograph of proposed directors.
  • Scanned copy signatures of proposed directors (Sign same as on pan card).
  • Address proof of the proposed registered office address (Utility bill/Rent agreement/sale Deed etc.).

Documents for NBFC License for the purpose of filing an application before RBI

  • Certified copy of Certificate of Incorporation (COI) and Certificate of Commencement of Business (in case of public limited companies).
  • Memorandum and Articles of Association of the company.
  • Copy of PAN of the company.
  • Detailed profile of each director, separately filled up and signed by each director.
  • Certificate of experience from the respective NBFC/s in case the Directors have gained NBFC experience.
  • CIBIL Data pertaining to Directors of the company.
  • Details of Authorized Capital and shareholding pattern of the company.
  • Copy of FD receipt & bankers certificate of no lien indicating balances in support of Net Owned Funds
  • Details of the bank accounts/bank balances/ complete postal address of the branch/bank, loan/credit facilities etc. availed
  • Self-attested Bank Statement/IT returns etc.
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