NBFC stands for Non-Banking Financial Company is a financial institute approved by RBI and registered under Companies Act 2013 and governed by ROC through MCA. These institutes provide Banking & Financial Services without having Banking License, which is the reason behind its growing popularity recently and can be of two types depending upon the activities such as:
Deposit accepting NBFC
Non-deposit accepting NBFC
Steps of Procedure for NBFC Registration Online
Following is the step by step procedure for NBFC Registration Online:
- Incorporation of NBFC: Applicant seeking for NBFC license must get first the certificate of incorporation by registering the company as public or private limited
- Apply to RBI for NBFC License: Applicant can apply online to RBI for NBFC License on RBI’s official website “COSMOS”. Download the excel sheet from the website, fill the complete details as required and submit the NBFC registration application online.
- Online reference number: Once the application is submitted online, there will be generated Online Company Application Reference Number for Certificate of Recognition application that is submitted online.
- Dispatch Hard Copy: After the generation of CARN, the applicant needs to dispatch physical application along with copies of the supporting documents to the regional office of Reserve Bank of India.
- Verification of Application: Upon the receipt of the application, ROC will scrutinize the same for its correctness and in case of application found correct, it will forward the same to head office of RBI
- Issuance of License: Upon the receipt of the application, the RBI head office thereafter shall issue the NBFC License.
Post-Registration Compliance
After obtaining the NBFC Registration Online, NBFC is required to comply with these provisions after getting NBFC License:
- Get the membership from all Credit rating agencies
- Get the E-KYC registration, and there shall be regular reporting of every borrower to RBI
- Filing of Income Tax Returns on or before the due date
- Company shall get done Statutory Audit and Tax Audit as per the applicability
- NBFC being the company shall file ROC returns such as MGT-7 and AOC-4 annually
Types of Non-Banking Financial Company
Following are the categories of NBFCs in India as follows:
- Asset Finance Company
- Investment Company
- Loan Company
- Infrastructure Finance Company
- Core Investment Company
- Micro-Finance Institution
- NBFCs Factors
- Mortgage Guarantee Company
- NBFC- Non-operative financial holding company
Conclusion
NBFCs are said to contribute significantly to the progress of BFSI such as Banking, Financial, and Insurance sectors. RBI and Companies Act besides defining the role of NBFCs; these authorities further regulates the activities of NBFC to ensure transparency in the financial system.
Note:- For more information about NBFC so visit at – Procedure for NBFC Registration Online
