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EC - MODULE 3-NBFC - PPT - Procedure NBFC

The document outlines the procedure and requirements for registering a non-banking financial company (NBFC) in India. It discusses the steps which include incorporation under the Companies Act, submitting various documents to the Reserve Bank of India (RBI), and complying with RBI regulations once approved. Key requirements include a minimum net worth of INR 2 crore, submitting audited financials, and that public deposits can only be taken for 12-60 months at an interest rate below the RBI ceiling. Certain entities like core investment companies are excluded from this registration process.

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Ananya Chaudhary
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60 views10 pages

EC - MODULE 3-NBFC - PPT - Procedure NBFC

The document outlines the procedure and requirements for registering a non-banking financial company (NBFC) in India. It discusses the steps which include incorporation under the Companies Act, submitting various documents to the Reserve Bank of India (RBI), and complying with RBI regulations once approved. Key requirements include a minimum net worth of INR 2 crore, submitting audited financials, and that public deposits can only be taken for 12-60 months at an interest rate below the RBI ceiling. Certain entities like core investment companies are excluded from this registration process.

Uploaded by

Ananya Chaudhary
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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FMR- MODULE 3-NBFC-

PROCEDURE AND FORMATION


CS MONICA SURI
ALSN
BENEFITS
Registration Steps

• STEP :
• REGISTARTION UNDER CA
• - Name Availability
• - Documentation
• Certificate of Incorporation
DOCUMENTATION POST REGN UNDER
Companies Act
1.Incorporation Certificate of the Company
2. Documents related to the Management and administration of the Company.
3. The documents stating the Article of Association and Memorandum of
Association of the form or company.
4. Documents verifying the location of the company.
5. Company Account which has been well audited for last three years.
6. Elaborate Information regarding the Director and the Partners associated with
the Company.
7. Resolution from the board favoring the formation of NBFC.
8. A bank account with a minimum equity share of INR 2Cr.
9. PAN Card of the Company
10. Additional documents which can be asked at the time of verification.
REGISTRATION PROCESS-continued… further
submission to RBI
• 1. An online application needs to be submitted along with the required
documents which generate a Company Application Reference Number
• 2. The hard copy of the documents as mentioned in the website during the
filling of the form needs to be submitted in the Regional Office of the RBI.
• 3. After the submitted documents are approved, the regional office sends
an application to the central office of the Reserve Bank of India which then
goes through the intricate examination and background checking of the
documents which then grants a certificate to the applicants’ company.
• 4. If all the terms and conditions as mentioned in the section 45-I A of the
Reserve Bank of India Act are satisfied, the certificate is granted to the
applicant for the Non-Banking Financial Company.
Companies not included under this ambit
• Core Investment Companies – (assets are less than 100 crore or public
funds not taken)
• Merchant Banking Companies
• Companies that are engaged in the business of stock-broking
• Housing Finance Companies
• Companies engaged in the business of Venture Capital.
• Insurance companies holding a certificate of registration issued by IRDA.
• Chit Fund Companies as defined in the Sec 2 clause (b) of the Chit Fund
Act, 1982
• Nidhi Companies as notified under Section 620(A) of the Companies Act
1956
PROCEDURE- checklist
• A company should first be registered under the Companies Act 2013
or should already be registered under the Companies Act 1956 as
either a Private Limited or a Public Limited Company.
• The minimum net owned funds of the Company should be Rs. 2
Crore.
• 1/3rd of the Directors must possess finance experience.
• The CIBIL records of the Company should be clean.
• The company must have a detailed business plan for five years.
• The company must comply with the requirements for capital compliances
and FEMA.
• After all of the above conditions have been satisfied the online application
on the website of RBI should be filled and submitted along with the
requisite documents.
• A CARN Number will be generated.
• A hard copy of the application also has to be sent to the regional branch of
the Reserve Bank of India.
• After the application is properly scrutinized, the License will be given to the
Company.
COMPLIANCES
• they cannot receive deposits that are payable on demand.
• The public Deposits which the company can take should be for a minimum
time period of 12 months and a maximum time period of 60 months.
• The interest charged by the Company cannot be more than the ceiling
prescribed by the Reserve Bank of India from time to time.
• The repayment of any amount so taken by the Company will not be
guaranteed by the Reserve Bank of India.
• All the information about the company as well as any change in the
composition of the Company has to be furnished to the Reserve Bank of
India.
• The deposits taken by the Public will be unsecured.
• The Company has to submit its audited balance sheet every year.
FAQ
1.What is the Procedure for formation of NBFC

2.What are the various steps involved in Incorporation?

3.What types of Companies are not included under this ambit?

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