By Admin 
Starting a financial services company in India? You’ve probably heard about NBFCs, or Non-Banking Financial Companies. They’re crucial players in the financial sector, offering loans, financing, and other services similar to banks—but without handling public deposits like savings accounts.
If you’re thinking about setting up an NBFC Registration , you’ll need to go through a registration process with the Reserve Bank of India (RBI). It might sound complicated, but this guide will break it down for you in easy-to-understand steps.
What is an NBFC?
First, let’s clarify what an NBFC is. It’s a company that provides banking-like services, but it doesn’t have a banking license. NBFCs can’t accept demand deposits, but they can still give loans, offer leasing services, and make investments.
Why Register an NBFC?
To legally run an NBFC in India, you need to register with the RBI. This not only makes your operations legitimate but also ensures you’re compliant with regulations. Without RBI registration, your company can’t provide financial services.
Basic Requirements for NBFC Registration
Before you begin the process, make sure your company meets these requirements:
- Incorporation: Your company must be a registered entity under the Companies Act, 2013.
- Capital: The company needs to have a minimum capital of ₹2 crore.
- Qualified Directors: Your company’s directors should have a solid background in finance or banking.
- Business Plan: A well-documented plan outlining how your NBFC will operate is essential.
Step-by-Step Process for NBFC Registration
Now, let’s go through the process of registering your NBFC in India.
Step 1: Set Up the Company
First, your company must be incorporated as either a private or public limited company under the Companies Act, 2013. While incorporating, ensure that your company’s objective is clearly focused on financial services.
Step 2: Gather the Required Capital
To proceed, your company needs a minimum capital of ₹2 crore, which should be verified by a statutory auditor and deposited in your company’s bank account.
Step 3: Prepare Documentation
You’ll need to have several documents ready to submit. These include:
- Certificate of Incorporation.
- Memorandum of Association (MoA) and Articles of Association (AoA).
- Business plan.
- Profiles of the company’s directors.
- Audited financial statements.
- Banker’s report showing that your company has the required capital.
Step 4: Submit an Online Application to the RBI
Once your documents are ready, go to the RBI’s COSMOS platform and create a new account. You’ll need to:
- Register as a new user on the RBI’s online portal.
- Complete the online application form with all necessary details.
- Upload your documents.
After submitting your application, you’ll receive a Company Application Reference Number (CARN), which will let you track your application.
Step 5: Submit Physical Copies to RBI
Within 30 days of your online submission, send hard copies of all your documents to the RBI’s regional office. Ensure that all the information matches your online submission.
Step 6: RBI Review and Scrutiny
After receiving your application, the RBI will begin reviewing it. This involves checking your company’s financials, the backgrounds of your directors, and your submitted documents. The RBI may ask for clarifications during this stage.
Step 7: Certificate of Registration (CoR)
If everything checks out, the RBI will issue you a Certificate of Registration (CoR), which officially allows your NBFC to operate.
Post-Registration Requirements
Once your NBFC is registered, it must comply with ongoing RBI regulations, such as:
- Filing annual returns.
- Maintaining the required capital levels.
- Submitting regular audit reports.
- Following the RBI’s Fair Practices Code.
Conclusion
Registering an NBFC in India involves a few steps, but it’s manageable if you’re well-prepared. Make sure you have all the necessary documents and meet the capital requirements before applying. Once registered, you’ll be in a great position to tap into India’s vast financial market and serve businesses and individuals.
By following this guide, you can navigate the NBFC registration process smoothly and focus on building your financial services company.