Non-Banking Financial Companies (NBFCs) play a crucial role in India’s financial sector. They offer a variety of financial products and services such as loans, leasing, and hire purchase, among others. If you’re interested in starting an NBFC, it’s essential to understand the registration process. In this article, we’ll discuss everything you need to know about NBFC registration in India.
What is an NBFC and why register?
An NBFC is a financial institution that provides banking services without a banking license. NBFCs are registered with the Reserve Bank of India (RBI) and are subject to its regulations. Registering an NBFC is essential because it provides legal recognition to the company, enables it to conduct financial activities, and ensures regulatory compliance.
NBFC registration process:
- Obtain Digital Signature Certificates (DSC) for Directors
- Obtain Director Identification Number (DIN) for Directors
- Choose a name and check availability with the Registrar of Companies (ROC)
- Prepare the Memorandum of Association (MOA) and Articles of Association (AOA)
- Apply for incorporation with the ROC
- Obtain a Certificate of Incorporation (COI)
- Apply for an NBFC license with the RBI
- Submit the application with required documents
- Obtain the NBFC license from the RBI
Eligibility criteria for NBFC registration:
- The company must be registered as a Private Limited Company under the Companies Act, 2013
- The minimum net owned fund (NOF) should be Rs. 2 crores
- The company must have a minimum credit rating of BBB-
- The directors of the company must have a minimum experience in the financial sector
Documents required for NBFC registration:
- Certificate of Incorporation (COI)
- Memorandum of Association (MOA) and Articles of Association (AOA)
- Business plan
- Board resolution to carry out NBFC activities
- KYC documents of directors and shareholders
- Net worth certificate of directors
- Credit rating report
Conclusion:
Registering an NBFC is a complex and time-consuming process that requires careful planning and preparation. It’s crucial to ensure that all eligibility criteria are met and all required documents are in order. By following the NBFC registration process, you can successfully start and operate an NBFC in India, contributing to the growth of the country’s financial sector.