Easily Obtain Non-Banking Financial Companies Registration

What is Non-Banking Financial Companies

In any economy, financial sector consists of several intermediaries. Apart from banking entities, there are many intermediaries’ like- investment intermediaries (such as mutual funds, hedge funds, pension funds, and venture funds), risk transfer entities (such as insurance companies), information and analysis providers (such as rating agencies, financial advisers, etc), investment banks, portfolio managers and so on.

All such entities that offer financial services other than banking may be broadly called Non-Banking Financial Institutions. NBFC are essentially companies which are defined as a company registered under the Companies Act. Which provides banking services without meeting the legal definition of bank such as holding a banking license, NBFC are basically engaged in the business of loans and advances, acquisition of shares, stocks, bonds, debentures, securities issued by government or local authority or other securities of like marketable nature, leasing, hire-purchase, insurance business, chit business, but does not include any institution whose principle business is that of agricultural activity or any industrial activity or sale, purchase or construction of immovable property. Trading in shares & securities in capital market is also falls under the definition of the NBFC.

NBFC cannot accept demand deposits and do not form part of the payment and settlement system. NBFC provide banking services without meeting the legal definition of a bank, that’s institutions are often still covered under a country's banking regulations.

In Simple word NBFC is a company that is not a Bank but provide Finance to others. NBFCs offer most sorts of banking services, such as loans and credit facilities, private education funding, retirement planning, trading in money markets, underwriting stocks and shares. There are two types NBFC’S

Process to register Non-Banking Financial Companies

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ADVANTAGES OF Non-Banking Financial Companies

NBFC Provides loans and credit facilities.

Trading money market instruments.

Wealth management such as managing portfolios of stock and shares.

Advise companies in merger and acquisition.

Prepare feasibility, market or industry studies for companies.

Discounting services e.g. discounting of instruments.

Certain mandatory disclosures are to be made about the company in the Application Form issued by the company soliciting.

FEATURES of Non-Banking Financial Companies

Make Application

NBFC have to make application for registration in companies Act, and with the RBI

Share Capital

Minimum paid up equity share capital must be 2 crore.


All NBFC required to submit a certificate from their statutory auditors every year

Monthly Return

According to RBI guidelines, All NBFC required to filling monthly return on 7th day of next month

Commence Business

NBFC must commence business with in 6 month form the certificate of registration.

Stock Exchange

If company listed then it has to fulfill stock exchange and SEBI Compliances

Company Soliciting

Certain mandatory disclosures are to be made about the company in the Application Form issued by the company soliciting


NBFCs lend and make investments and hence their activities are akin to that of banks, however there are a few differences as given below:
  • NBFC cannot accept demand deposits;
  • NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself;
  • Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks.
A company incorporated under the Companies Act. Desirous of commencing business of non-banking financial institution as defined under relevant Section of the RBI Act, 1934 should comply with the following:
  • It should be a company registered under the companies Act.
  • It should have a minimum net owned fund of Rs. 2 Crores
Some of the important regulations relating to acceptance of deposits by NBFCs are as under:
  • The NBFCs are allowed to accept public deposits for a minimum period of 12 months and maximum period of 60months.
  • NBFCs cannot offer higher interest rates, and rate will be prescribed by RBI from time to time. The present Interest rate is 12.5%.
  • NBFCs cannot offer gifts/incentives or any other additional benefit to the depositors.
  • NBFCs (except certain AFCs) should have minimum investment grade credit rating.
  • The deposits with NBFCs are not insured.
  • The repayment of deposits by NBFCs is not guaranteed by RBI.
The NBFCs that are registered with RBI are:
  • equipment leasing company;
  • hire-purchase company;
  • loan company
  • Investment company;

The above type of companies may be further classified into those accepting deposits or those not accepting deposits.

Non- banking finance company must commence business with in 6 month from The COR if company not commence within 6 months then COR will stand withdrawn.
Yes, if company wants to change its name then RBI prior approval is required.
No, NBFCs cannot accept deposits from NRIs except deposits by debit to NRO account of NRI provided such amount does not represent inward remittance or transfer from NRE/FCNR (B) account. However, the existing NRI deposits can be renewed.
Yes, nomination facility is available to the depositors of NBFCs. According to the Reserve Bank of India Act, 1934 depositors of NBFCs are permitted to nominate one person to whom the NBFC can return the deposit in the event of the death of the depositor/s. NBFCs are advised to accept nominations made by the depositors in the form.
All NBFCs are not entitled to accept public deposits. Only those NBFCs holding a valid Certificate of Registration with authorisation to accept public deposits can accept/hold public deposits. The NBFCs accepting public deposits should have minimum stipulated net owned fund and comply with the directions issued by the bank.
NO, the Reserve Bank does not accept any responsibility or guarantee about the present position as to the financial soundness of the NBFC or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the NBFC.
Yes, every company which is incorporate as NBFC, it must be register with RBI but same company, exempted from the requirement of registration under the RBI Act, 1934.
  • Housing Finance Companies
  • Merchant Banking Companies, Stock Exchanges, Companies engaged in the business of stock-broking/sub-broking, Venture Capital Fund Companies
  • Nidhi Companies
  • Insurance companies
  • Chit Fund Companies


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