Non-Banking Financial Companies are playing a vital role in the Indian economy. NBFC is a company that provides financial services like leasing, hire purchase, loans, and advances. There are a few types of people or businesses with whom traditional banks don’t want to do business. NBFC works with these types of people as an alternate source of income.
NBFC is directly under the RBI as per the framework of chapter IIIB under the Reserve Bank of India Act 1934.
The best example of NBFC in India is Corpseed.
Documents For Registration:
1) The Certificate of Incorporation of the Company Certified copies
2) The main object clause of the Memorandum of Association of the Company Certified copies
3) Board resolution(s) stating with the following terms:
The company should states that it is not in business with any NBFC activity or has not carried on in the past. If the company was involved in the past it has now stopped any NBFC activities and will not commence any activity before getting registration from the RBI.
4) The “Fair Practices Code” as per RBI Guidelines has to be followed by the Company
5) Copy of the Fixed Deposit receipt along with the banker’s certificate indicating Net Operating Fund.
6) The companies which are already registered have to submit the documents of the last 3 years OR from the date of incorporation of your company to the closure date of the previous financial year:
Audited balance sheet and annexures
Profit & Loss statement
7) Banker’s report regarding
8) Certificate of professional qualification and highest education for each director.
Eligibility for NBFC Registration:
The Banker’s report should be about the dealings of entities about the group of directors, associates, subsidiaries, the holding company, and related parties.
The report should show the dealings with these bankers as a borrowing entity or a depositing entity.
Note: Bankers report is required from all the bankers which deal with each of these entities. The report should include the details of deposits along with loan balances as of the date of application.
The Company has not accepted public funds in the past and/or does not hold any public fund as of the date, and the Company shall not accept any deposits in the future without the prior approval of the Reserve Bank of India. The company shall seek prior approval of RBI before creating any customer interface in the future