When NBFC Registration with RBI is

Required?
NBFC stands for Non-Banking Financial Company incorporated under Companies Act 2013 and
regulated by Reserve Bank of India. No NBFC is allowed to operate as such without obtaining an
NBFC registration certificate with RBI. NBFCs are engaged to perform financial activities
similar to that of banks. In this blog, we have discussed in brief about NBFC and NBFC
Registration with RBI.

Pre-requisite for NBFC Registration with RBI in India

Entity seeks forward to get registered under RBI shall have following requirements fulfilled:

 NBFC shall be registered as a Company through MCA under Companies Act 2013
 Such Company shall have Net Owned Fund of INR 2 Crore.
 NBFCs can accept deposit with a minimum of 12 months and a maximum of 60 months
and no deposit repayable on demand shall be accepted.
 NBFCs cannot offer interest rates higher than prescribed by RBI

The Procedure of NBFC Registration with RBI

Once the NBFC is registered as a Company under Companies Act 2013 and has obtained
Certificate of Incorporation shall apply to the regional office of RBI for registration as per the
following steps:

 Incorporate the Company either as a private or public company with main objects of
carrying the financial activity.
 Prepare a business plan with additional details such as capital induced, costing, expansion
plan, etc.
 Apply online to RBI through its official website COSMOS
 Fill the application form with necessary details, and after the online submission of the
form, Application Reference Number is generated which can be used for future reference.

 The applicant also needs to submit a hard copy of all the documents to the concerned RBI
authority.
 Once the application is completed and submitted, application status can be checked using
Application Reference Number
 RBI upon receipt of application verifies the same for its correctness and allots the license to
an applicant.

Documents Required for Registration

 Updated KYC of directors and signed director’s profile

 MOA and AOA
 Certificate of Incorporation
 PAN of the company
 Board resolution for authorization
 If any experience in the financial sector, supporting documentation of the same
 CIBIL score of every director
 Banker’s certificate indicating Net Owned Fund which shall not be less than INR 2 Crore
Difference between NBFC and Banks

Banks NBFC
Banks provide banking services as a financial NBFC also provides banking service however
intermediary needs no bank license
Banks are registered under the Banking NBFCs are incorporated under the Companies
Regulation Act 1949 Act 2013/1956
Banks accept repayable deposits NBFC cannot accept a deposit that is repaid on
demand
Foreign investment cannot exceed 74% NBFCs can accept deposit up to 100%
Banks have to maintain SLR and CRR No such requirements for NBFCs
mandatorily
Banks provide several customer services such NBFCs cannot provide such services to its
as overdraft, traveler’s cheque, etc customer

Conclusion
NBFCs play a vital role during economy distress by acting as a most vibrant financial system.
NBFCs provide wide financial services; including long-term investment and financing services
have gained popularity in the banking sector. Our team (Swarit Advisors)of experts will provide
complete assistance for NBFC registration, including the coverage of legal and professional
services as well as complete compliances.