Importance and Process Of NBFC Registration In India

In this article, we are going to discuss the online process of an NBFC or the non-banking financial company and the process of the NBFC Registration. Let us start with what it is first.

WHAT IS A NON-BANKING FINANCIAL COMPANY (NBFC)?

Non-banking financial company or as its short abbreviation is NBFC is a kind of registered company that gets registered under the company’s act. These NBFCs get engaged in businesses like lending loans and other advances. It also gets involved with the acquisitions of banking like activities such as shares, stocks, debentures, bonds and securities. All of which are issued by the government or the local authorities.

The principal business of receiving deposits is followed by a non-banking financial company under a scheme or a certain arrangement in a one lump sum amount or in instalments by the way of contributing or perhaps in another certain manner. This also falls under the non-banking financial company activity (a residuary non-banking financial company).

WHAT IS THE DIFFERENCE BETWEEN BANKS & NBFCS?

Non-banking financial companies lend money and make certain investments and this is why their activities are recognized to be similar to that of a bank’s activities. However, there are still some differences that are put below in points:-

• NBFC cannot accept demand deposits,
• Unlike in the case of banks, Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs.
• NBFCs doesn’t form a part of the payment and settlement system and cannot issue cheques drawn on itself,

WHAT ARE THE REQUIREMENTS FOR REGISTRATION WITH RBI?

Non-banking financial company that has been incorporated under the company’s act of and wishes to commence a business of the non-banking financial company as a financial institution then they must get NBFC Registration.

The NBFC Registration has to be done under section 45 I (a) of the reserve bank of India act of 1934 and it must comply with the following: –

• A company must get registered under Companies Act, 2013.
• And it should have a minimum net owned fund of Rs 200 lakhs.

WHAT IS THE PROCEDURE FOR APPLICATION TO THE RESERVE BANK OF INDIA FOR NBFC REGISTRATION?

• The company that is applying for NBFC Registration is required to apply file for an application online and then submit a physical copy of that application (print out) to the regional office of the reserve bank of India. The filing for the NBFC Registration application has to be done through the official website of RBI, which is cosmos.rbi.org.in
• At this stage, there won’t be any need for logging in to the cosmos application and this is why there will be no requirement for user id. Your company can simply click on the company registration on the main log-in page and you will be redirected to a window that will show an excel application form that is available for being downloaded. The company may download this form and fill in the information requested.
• The company should put in the correct name of the respective regional office in the field C 8 of the Annex i.e. identification of particulars into the online excel NBFC Registration application form.
• Now after following through the above steps, the applicant company shall then receive a reference number for the COR application that’s been filled online. After which the applicant can submit the copy of this online form (this time indicating the online Company application reference number. This along with the requested list of required documents) has to be then submitted to the regional office too.
• Now the company can further easily check for their NBFC Registration application status by filling in the given acknowledgement number until they finally receive their NBFC Registration certificate.

For more details, you may anytime contact Swarit Advisors as we are 247 hr available to serve our customers in any online legal processes of registrations.

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