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Regulatory Requirements of NBFC in India

To operate as a NBFC, it needs to obtain “Certificate of Registration” from the RBI and the NBFC registration requirements are listed as below:

  1. The company must be registered either as a private or as a public limited company in India.
  2. It must have a minimum net owned fund of Rs 2 crore.
  3. NBFCs are allowed to accept/renew public funds for a minimum period of 12 months and a maximum period of 60 months.
  4. They cannot accept deposits repayable on demand.
  5. Requirement of minimum investment grade credit rating need to be fulfilled.
  6. There is no guarantee from the RBI on repayment of the deposits.
  7. You need to submit hard copies of the list of documents at the regional office of RBI.
  8. RBI is very particular and strictly prohibits any kind of exchange of gifts /incentives or any other additional benefits.
NBFC Registration – Requirements for Registration of Type 1 & 2 NBFC ND

Documents Required For the Registration of Type 1 – NBFC ND:

As per the guidelines laid by the RBI, one need to submit the following documents along with the prescribed application form for registering your NBFC as Type1-NBFC, such as:

  • In case you are a public limited company, a certified copy of Certificate of Incorporation and Certificate of Commencement of Business need to be submitted.
  • Certified copies of an extract of the main clause of the MOA related to the financial businesses.
  • Certified true copy of Board Resolution stating the following:
    • Company has not carried or stopped any NBFC activity before getting registered with the RBI and will not carry on or start the same before getting the same from the RBI.
    • Company has formulated “Fair Practices Code” as per the RBI guideline.
    • The company does not have any customer interface as on date and will not have the same in the future without the approval of RBI.
    • A copy of Fixed Deposit receipt and bankers certificate which act as an indicator of balance in support of Net Owned Fund.
    • Bankers report in respect of Applicant Company, its group/subsidiary/holding company/related parties having a substantial hold in the company.

Documents Required For the Registration of Type II – NBFC ND:

  • In case you are a public limited company, a certified copy of Certificate of Incorporation and Certificate of Commencement of Business need to be submitted.
  • Certified copies of an extract of the main clause of the MOA related to the financial businesses.
  • Certified true copy of Board Resolution stating the following:
    • Company has not carried or stopped any NBFC activity before getting registered with the RBI and will not carry on or start the same before getting the same from the RBI.
    • Company has formulated “Fair Practices Code” as per the RBI guideline.
    • Copy of the highest educational and professional qualifications of all directors.
    • Copy of the experience certificate of all the directors.
    • A copy of Fixed Deposit receipt and bankers certificate which act as an indicator of balance in support of Net Owned Fund.