What are the requirements for registration of NBFC with RBI?
The requirements for registration of NBFC with RBI are as follows –
- NBFC should be registered either as a public or a private limited company in India.
- It should be registered under section 3 of the act.
- It should have a minimum net owned fund of Rs. 2 Crore and must not include borrowed fund (Minimum owned fund varies from NBFC to NBFC)
- Company’s financial assets must include more than 50% of the total assets.
- Company’s revenue from fiscal assets must include more than 50% of the gross income.
- At least 1/3rd of the directors must have a proven experience in the field of Finance.
- There should be a detailed plan for the next 5 years.
- NBFC’s are allowed to accept or renew public funds for a minimum period of 12 months and maximum period of 60 months.
- NBFC’s cannot accept deposits repayable on demand.
Documents Required to obtain NBFC License
The documents required for NBFC license are as follows –
NBFC Registration Fees in India
Non-banking financial corporation bargains in different money related exercises such as giving credits, resource account, microfinance, interest in securities and so on. NBFC is governed by RBI & is mandatory to take RBI permission before starting NBFC operations in India. The most important thing for any non-banking financial corporation to begin in India is RBI permit.
Key points before going ahead with NBFC registration
Before doing NBFC registration, you need to focus on the following points mentioned below -
- It is mandatory for every organization to apply for RBI permit before starting their operations as NBFC. Other than organization, nobody can apply for RBI permit in India.
- In order to get RBI permit, it is mandatory for a company to have net owned fund of Rs.2 crores as a base. In case of micro finance business, it is Rs.5 crores.
- The achievement rate of RBI permit depends on the profile of advertisers.
- NBFC’s are of different types and make sure about the NBFC you want to enroll.
- NBFC can’t acknowledge open stores until it is specifically approved by RBI.
NBFC Registration Process in India
The procedure for NBFC registration in India is as follows –
- If applying offline, you need to submit the hard copy of the application form to the regional office of RBI along with the required documents.
- If applying online, you need to apply on RBI’s website – https://cosmos.rbi.org.in in order to submit an application online.
- At this stage, there is no need to login to fill the cosmos application. Hence, no need to make User ID’s. Applicant Company needs to click on “Click for company registration” link given on the login page of the cosmos application.
- After clicking the link, an application form (NBFC or SC/RC) in the excel form is displayed on the window for downloading.
- After downloading the form, Applicant Company needs to fill the data in the application form and upload the same on the website.
- You need to put correct regional office name in the field “C-8” of the “Annex – identification particulars” of the excel application form.
- After submitting the excel form, a company application reference number is generated online.
- After generation of company application reference number online, you need to submit the hard copy of the application form along with the online company application reference number and supporting documents.
- The application and the documents are analyzed by the officials of RBI and lastly, the application is approved by RBI. The complete procedure may take time period of 90-120 days.
- Applicant company can easily check the status of their application online by inputting the acknowledge number.
What is “Owned fund” and “Net owned fund” in relation to NBFC’s?
Owned fund means aggregate of –
Owned fund excludes reserves created by asset revaluation after deducting –
Net Owned Fund
Net owned fund equals to owned funds minus
What is meant by Principal business in the context of a registered NBFC?
There is no term like “Principal business” defined by RBI in RBI act, 1934. Any financial activity performed by business entity will be considered as its principal business if –
If the company fulfills the above two mentioned conditions, company will be considered eligible for NBFC registration by RBI.
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