What is NBFC?

Non-Banking Financial Company is similar to a conventional Bank except issue on Demand drafts and cheques. NBFC principally provides money services to people and Businesses. NBFC is understood for fast loan process compared to the bank, Most of the NBFC matured today and actively participating in loaning model, that is growing quicker than the normal loaning model of Bank.

NBFC is associate integral a part of our economy and that they play necessary role within the Country building by increasing the reach of finance to the community. the govt. has been promoting entrepreneurship in order that native Moneylenders will come back and organize their loaning business. Unorganized lenders and Ex-Bankers are terribly active for NBFC Registration in recent few years.

Steps for NBFC Registration

  • Formation of Company under Companies Act.
  • Preparation of Business plan.
  • Deposit the amount of Rs. Two Crores in FDR with your Banker.
  • Preparation of NBFC application alongwith all documents as provided in RBI’s checklist for NBFC Registration.
  • Submission of application with the RBI.
  • NBFC License is subject to your application and documents justifying your financial background.

Part A – Incorporation of Company under Companies Act, 2013

  • Copy of Pan Cards and Aadhar Cards of proposed directors.
  • Passport sized photographs of proposed directors.
  • Scanned copy of signatures of proposed directors.
  • Address proof of the proposed registered business address (Electricity bill/Rent agreement/sale deed etc.).

Part B – Business Plan

  • Directors and Executive Summary
  • Loan Product
  • SWOT Analysis
  • Lending System
  • Model of Financing
  • Financial Forecast/ Projections

Part C – Documents list for NBFC Registration with RBI

  • Certified copy of Certificate of Incorporation issued by the ROC.
  • MOA and AOA of the company
  • The Audited financials and Profit & Loss account alongwith Director’s & Auditor’s Report for the complete period of the company’s existence, or for last 3 years, whichever is smaller.
  • Copy of the certificate of Director’s highest academic and financial qualification.
  • Detailed profile of every director, separately filled up and signed by every director.
  • Copy of Director’s expertise certificate within the Financial Services Sector.

It is always better to take help of some expert for registration of NBFC because it takes lot of expertise to draft business plan and file documents with RBI. Thus, we at easylegaltax offers professional services in relation to NBFC Registration to help you get your NBFC registered with RBI.

Disclaimer: –This article is for the general information and awareness of its readers, In-case of any legal matter in relation with readers, they are expected to have legal opinion before placing reliance on it. Further it contains completely author’s views on the subject and completely unbiased based on authors own experience, study and understanding.

Author:- CA Udit Aggarwal (FCA, LLB, BCOM) is Chartered Accountant and Legal Consultant, academically he is highly qualified and have gone through various certifications. He extensively speaks and writes on finance, taxation and legal matters. The author can be reached at [email protected]