Non-Banking Financial Company (NBFC) is a dream for every finance enthusiastic person, who runs his own small finance business in India. It has been observed that people all over India run a finance business without any registration, but they are doing it on a little higher scale.
So, these people often run this business illegally because they didn’t know the exact way of doing it legally. Therefore, if you are one of them, then here we have the solution for you. We will write the important points in getting your business legalized, about the most important form of business, i.e. NBFC registration.
Here are important points for NBFC registration in India;
1. Register a Company with a minimum capital requirement
For NBFC registration, the first thing you need is a company. No other entity can apply for RBI license. Further, the company should either be a Private Limited Company or Public limited company. One Person Company cannot apply for RBI license. During the process of Company Registration, make sure the MOA and AOA are well-drafted in consonance with the objectives of the type of NBFC you choose to make.
Further, you must register the company as per the minimum capital requirement of the type of NBFC. For example, microfinance is registered with 5 crores, while the loan company can be registered with 2 crores.
2. Deposit the capital into the fixed deposit and obtain a certificate
After company registration, the next step is to invest the entire sum into the fixed deposit and obtain no lien certificate from the bank. The deposit amount should be equal to the subscribed capital of the company.
3. Get all the required documents as per the checklist for NBFC license
The next step is to align all the required documents properly which are required for RBI registration. Before filing the application online, it is recommended to go through the requirement list of the NBFC and collect all the required documents in place. Here are some of the documents which may be required:
- Certified copies of Certificate of Registration
- Certified copies of an extract of only the main object of the MOA.
- Copy of Board resolution
- Copy of FD receipts and the certificate from the banker about the no lien certificate.
- Bankers report for Applicant Company, group companies.
- A very strong promoter profile which describes their experience in the finance profile. Promoter background is one of the key points for getting the RBI license.
4. Fill online application on the cosmos.rbi.org.in
Once you are ready with all the required documents, the next step is to file the online application with the RBI for NBFC registration. The application contains a lot of technical terms and hence, it is recommended to take the help of professional. Don’t file a wrong application; otherwise, it will be rejected straightway.
5. Submit the hard copy to the regional office of the Reserve bank of India (RBI)
Once the application is filed online, the next step is to prepare a complete set of physical documents and submit the same to the regional office of the Reserve bank of India.
6. Follow up with RBI
The NBFC registration usually takes around 3 to 6 months, hence it is important to keep your patience intact and follow up properly with the RBI and remove any foreseen errors or omissions.
NBFC registration is a matter of high importance and involves lots of complexities. Therefore, it is recommended to hire our professional services to complete the NBFC registration hassle-free.