NBFC
NBFC
A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956/ Companies Act, 2013 engaged in the business of
- loans and advances
- acquisition of shares/stocks/bonds/debentures/securities
- leasing and hire-purchase
- insurance business
- chit business
But does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property.
A company which fulfills 50-50 criteria of principal business has to be registered as NBFC by RBI. 50-50 criteria of principal business means when either company’s financial assets constitute more than 50 per cent of the total assets or income from financial assets constitute more than 50 per cent of the gross income.
Eligibility Criteria to Register as NBFC
- A company should be registered under the Companies Act, 1956/Companies Act 2013
- The company should have a minimum net owned fund of ₹ 200 lakh/ Fixed Deposit of Rs. 200 lakh.
- one of the directors should be having exposure to the Financial industry for running the Operations of NBFC.
- The cibil score of all the directors should be more than 700.
NBFC
NBFC
Brief procedure to set up NBFC in India
To register/ Set up NBFC in India, Company has to apply the Reserve Bank of India for the License to carry
the business of NBFC. Following are the brief steps in this regards:-
Steps -1:- Incorporate a company under a companies Act 2013 with a minimum paid-up capital of Rs. 2 Crores.
Step-2:- Open current bank account of the Company and deposit 2 Cr. as per the shareholding of the members and keep this 2 Cr. as Fixed deposit which is free from all lien
Step-3:- File online application with the RBI portal with all the annexures.
Step-4:- Two sets of Physical application originally will be submitted to the RBI Mumbai head branch.
Step-5:- RBI scrutinizes the application and asks for some information/clarification/submission.
Step-6:- Submit a reply to RBI within 30 days of receiving notice.
Step-7:- On being satisfied by RBI, Certificate is granted!