What Are The Types of NBFC in India?
There are Two kinds of NBFC in India and they are as follows-
NBFC based on the authorization to take deposits
1.The Deposit taking NBFC (Type 1)
2.Non- Banking accepting NBFC (Type 2)
NBFC based on their activities :
1.Non-Banking Financial Company-- Investment and credit company
2.Infrastructure Debt Fund
3.Peer to peer lending marketplace
4.Infrastructure Finance company
5.Core investment company
6.Mortgage guarantee company
7.Mutual benefit Finance company
What is the RBI NBFC Pre Registration Requirement?
1.Register a company as per Companies Act, 2013
2.Minimum capital of 2 crores in the account holder is Compulsory.
3.Create a Fixed Deposit of 2 Crores.
4.FDI compliance as per FEMA Act ( in case of Foreign investment)
5.Complete Documentation is required
6.Necessary documents along with FD Receipt is to be submitted before RBI.
Documents required for NBFC License?
1.MOA of NBFC company is being required in which object of the company is represented.
2.Certified copy of registration certificate is required from the Regional Registrar of Companies.
3.Latest updated KYC and income Proof of directors and shareholders are required.
4.Updated net worth of Director and shareholders of the company is to be attached along with the documents.
5.Banker report on initial Fixed deposit of Rs. 2 cr.
6.Proof of Educational qualification of directors and shareholders.
7.Latest credit reports of directors and shareholders.
8.Submission of Director’s profile which proves at least 10+ years experience in financial institution
9.Detailed action plan about the Loan products, Fair practice code, credit and Risk assessment policy
10.Submission of IT process.
Procedure for registration of NBFC Registration ?
1.Firstly one should hire the consultant who is expertise in this field . Fortunately we are one of those ( BIATConsultant )
2.Then there should be some Business plan in its registration process which involves Founders and executive services, Loan Product, lending procedure with standard operating procedure, SWOT analysis, credit and risk model, competitors analysis, Financial forecast etc.
3.Formation and incorporation of the company and that company must be NBFC registration under companies act, 2013 or earlier Companies Act, 1956.
4.The minimum amount of net owned capital or fund which must be possessed by the aspirant company for NBFC registration in india is 2 Cr, i.e. paid up equity share capital.
5.Open a fresh bank account. Here NBFC registration required minimum capital has to be kept in the deposit account opened which must be free from all liens. Generally such amounts are maintained in the form of Fixed deposit, but while making the application to the RBI then this amount has to be maintained in their Bank account as RBI verifies the deposits of the company with the concerned bankers.
6.The aspirant company is required to submit the application for NBFC registration online to the RBI. after which the Applicant company will get an application reference number for NBFC registration. After that, the company is required to submit the hard copy of the online application along with the required documents to the concerned regional office of the RBI.
What are the sources of Funds For an NBFC?
Yes NBFC are the companies that are registered under Companies Act, 2013 and after its registration, the Applicant is required to obtain its Certificate of registration or NBFC License from RBI.
What is meant by principle business in context of a registered NBFC?
If an NBFC has more than 50 percent of of the total assets or revenue from financial services comprises more than 50% of the gross income. A company fulfilling both these conditions will be eligible to apply for NBFC license to the RBI.
Can NBFCs accept deposits?
Only those NBFCs who are granted license or eligibility to accept deposits only those NBFCs can accept deposits. However it must not be a Demand Deposit.
Does NBFC required to be registered with RBI?
To carry out its operations, it is required for NBFCs to get it registered to RBI, because RBi have controls the day to day business and also issues directions from time to time.
What are the basic requirement for the takeover of NBFCs?
Prior approval from RBI is required and once it is approved then an Application is to be submitted on the letterhead of the company to the regional office of the RBI for getting the approval. Once the approval is granted then public notice in the leading newspaper is published . thereafter share purchase agreement is signed and takeover is effected.
Is FDI (Foreign Direct Investement) is allowed in newly incorporated NBFC?
There is no limitation on FDI in NBFC, but FDI must be in the form of
T1 equity. If you bring FDI at the initial stage of registration, you need to comply with FEMA provisions along with the RBI Act.