Easing NBFC License Online Process in India

NBFC stands for Non-Banking Financial Corporation is a company registered under the provisions of Companies Act 2013. NBFCs deal in several Financial Services such as the provision of loans, assets financing, investment in securities, etc. NBFC is a type of financial corporation that deals in finance provide shadow banking services to their customer without holding any banking license.

If you are interested in entering the financial market soon, this article explains everything about NBFC such as the procedure for NBFC License Online, documents required, capital required and other key-requirements. Let us understand in detail henceforth about NBFC and how it operates in India.

Following is the easy step to obtain NBFC License Online:

• Start the process by creating a company under the Companies Act 2013. No other entity other than the company is allowed to apply for an NBFC license. Any type of company such as private or public can apply for a license. However, OPC cannot apply to RBI for NBFC License. The company shall mention the objectives of financial activities on its MOA.
• After the registration of the company, it needs to raise its capital to match the net-owned fund on INR 2 Crore as per RBI norms for NBFC registration.
• Get ready the necessary documents beforehand as per the checklist for NBFC registration:

• Certified copy of Certificate of Incorporation
• Copy of Memorandum of Association
• A certified true copy of board resolution for authorization
• Experience Profile of Promoters.

• Visit the official website of RBI "COSMOS" to apply for NBFC License. NBFC License application contains few technical terms. Thus it is advisable to get professional expertise assistance.
• The applicant shall create a login credential by creating a user-id and password on the window to proceed further.
• Click on the Excel Sheet to download the application form. Thereafter complete the entire form by filing necessary detail and submit the form online
• After the submission of the application online, the applicant needs to submit a hard copy of the complete set of documents to the regional office of RBI.
• The applicant shall use the acknowledgement number to keep the track on the status of the application

RBI upon the receipt of application can either approve or reject the same as per its discretion. If the documents and all the information is up to the norms, the authority may sanction the License to the applicant.

Following are the key-requirement for registering NBFC in India:

• No other entity than a Private or Public Company is allowed to apply for NBFC License.
• For applying for NBFC License, an entity must have its net-owned fund of INR 2 Crore. In case the company carries the microfinance business, it shall have a net owned fund of INR 5 Crore.
• Mostly, the success rate of the grant of NBFC license depends upon the profile of the promoter. Therefore it is recommended to include a strong profile of promoters in your promoter team.
• NBFC can accept deposits only upon the specific authorization by RBI.
• The company carrying the following activities cannot be considered for applying NBFC:

1. Agricultural activity
2. Industrial activity
3. Purchase/sale of goods
4. Providing service relating to construction of the immovable property

• At least one-third of total directors shall have Expertise in Finance

Following categories of Companies can apply for NBFC License:

• Asset Finance Company is a financial institution whose principal activity is to finance the physical asset such as automobiles, generators, lathe machines, and material handling equipment.
• Investment Company is a financial institution whose principal activity is acquiring and dealing in securities, stock, shares, bonds, and similar financial securities.
• Loan Company indulges in the activity of providing finance, make loans & advances, or other related activities.
• Infrastructure Companies are engaged in financing infrastructure and deploy 75% of its total assets in infrastructure loans 
• Core Investment Company has an asset size of INR 100 Crore and is indulge in the business of accepting deposits.

In case you intend to enter the financial market, one must get the NBFC License Online by following simple procedures. Due to NBFC's quick sanctioning of Loan makes it a preferable choice over the traditional banks these days. Contact our team of experts and consultants to get NBFC License with ease in no time.