Definition of NBFC
A Non-Banking Financial Company (NBFC) is a type of financial institution that provides a wide range of banking services similar to traditional banks, but they do not hold a banking license. Instead, NBFCs are regulated by the Reserve Bank of India (RBI) under the provisions of the Reserve Bank of India Act, 1934.
NBFCs typically engage in activities such as lending and credit provision, investment activities, wealth management, asset finance, and other financial services. They play a crucial role in extending credit to sectors of the economy that may not have access to traditional banking services, thereby contributing to financial inclusion and economic growth.
Note: Unlike banks, NBFCs cannot accept demand deposits from the public, issue checks drawn on itself, or operate payment and settlement systems.
NBFC Business Models
Non-Banking Financial Companies (NBFCs) operate under various business models within the finance industry. Some common business models include:
Lending and Credit
Providing loans (personal, business, vehicle, mortgage) to individuals and businesses.
Asset Finance
Financing solutions for equipment, machinery, and vehicles (leasing, hire purchase).
Microfinance
Small loans for underserved populations and micro-entrepreneurs.
Wealth Management
Portfolio management, mutual funds, and financial planning services.
Pre-Requisites for NBFC License
- Incorporation: Must be registered under the Companies Act, 2013 (Pvt Ltd or Ltd).
- Net Owned Fund (NOF): Minimum NOF of ₹2 Crore (or as prescribed by RBI).
- Management: Promoters/Directors must have relevant financial experience.
- Fit & Proper: Clean track record with no criminal history.
- Business Plan: A detailed 5-year financial roadmap.
Documents Required
Corporate Docs
- Certificate of Incorporation (COI)
- MOA & AOA
- Board Resolution
Promoter Docs
- KYC (PAN, Aadhaar)
- Experience Certificates
- Net Worth Certificates
Financial Docs
- Banker's Report
- Audited Financials
- Fixed Deposit Receipt (NOF)
Registration Process
Company Registration
Incorporation of a new company with the required authorized capital.
NOF Requirement
Depositing the specific Net Owned Fund (₹2 Cr) in a bank FD.
Application Filing
Online application submission via RBI COSMOS portal with all documents.
RBI Scrutiny
Responding to RBI queries and facilitating background checks.
License Issuance
Grant of Certificate of Registration (CoR) upon successful verification.
Frequently Asked Questions
Find answers to common questions about NBFC Registration.
What documents are required for NBFC Registration?
Required documents typically include identity proof, address proof, business plan, financial statements, and specific regulatory forms. Our team will provide a complete checklist during consultation.
How long does the registration process take?
The timeline varies based on complexity and regulatory requirements. Typically, the process takes 30-90 days. We offer fast-track options for urgent requirements.
What is the cost for this service?
Pricing depends on the specific requirements and scope. Contact us for a customized quote. We offer competitive pricing with transparent fee structures.
Do you provide post-registration support?
Yes! We provide comprehensive post-registration compliance support including annual filings, regulatory updates, and ongoing advisory services.
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