A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956/2013 and is engaged in the business of loans and advances, deposits, acquisition of shares stock/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 principal business is that of agriculture activity, industrial activity, sale/purchase/construction of immovable property. To register NBFC in India, the Company must have approval from Reserve Bank of India.

1. Equi Corp Associates, Advocates
& Solicitors
NBFC Registration in India
TRANSACTION ADVICE LITIGATION
Delhi-NCR, INDIA
NBFC Registration in India
admin@equicorplegal.com +91 9958709189

2. Indian Financial System
Financial Intermediaries Financial Markets Financial
Assets/Instruments
Banks NBFC
Mutual
Funds
Insurance
Organization
Money Market Capital/Securities MarketBanks NBFC
Mutual
Funds
Insurance
Organization
Leasing Companies
Hire-Purchase/Consumer Finance
Companies
Housing Finance Companies
Venture Capital Funds
Merchant Banking Organization
Credit Rating Agencies
Factoring and Forfeiting Org.,
Stock broking firms
Depositories
Money Market Capital/Securities Market
Primary Market Secondary
Market
Primary/Direct Indirect Derivatives
Leasing Companies
Hire-Purchase/Consumer Finance
Companies
Housing Finance Companies
Venture Capital Funds
Merchant Banking Organization
Credit Rating Agencies
Factoring and Forfeiting Org.,
Stock broking firms
Depositories
Derivatives
Equity
Preference
Debentures
Innovative debt
instruments
Forward
Futures
Options
Convertible Debentures
Non- Convertible
Debentures
Secured Premium Notes
Warrants
Mutual Fund-units
Security Receipts
Pass Through
Certificates
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3. Post-1991 Phase Organization of the Indian
Financial System
Privatization of
financial
institution
Banks
Mutual-Fund
Insurance
Companies
Reorganization of Structure
DFIs/PFIs Banks NBFCs Mutual-funds Capital
Market
Money-
Market
Privatization of
financial
institution
Banks
Mutual-Fund
Insurance
Companies
Capital
Market
Money-
Market
Primary
Stock-
exchange
Investor Protection:
SEBI
Prudential Norms:
Credit/advance
portfolio
Investment
Portfolio
Capital adequacy
Prudential Norms:
Credit/advance
portfolio
Investment
Portfolio
Capital adequacy
Exposure
Norms:
Securitisation,
Asset
Reconstruction
And Enforcement
Of Security
Interest
Asset-Liability
Management Credit Risk
Management
Country Risk
Management
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4. NBFC- An
Introduction
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5. NBFC Growth Factors
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6. Classification of NBFC’s
Equipment
Leasing
Company
Residual
non banking
company
Mutual
benefit
financial
Company
Residual
non banking
company
Micro
finance
companies/i
nstitutions
Loan
Company
Mutual
benefit
financial
Company
Micro
finance
companies/i
nstitutions
Hire
purchase
finance
company
Investment
company
Loan
Company
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7. Classification of NBFC’s
Asset Finance Companies Investment Companies
NBFC since
2006
Loan Companies
Infrastructure Finance
Companies
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8. Classification of NBFC’s
contd.
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9. Can NBFC receive
deposit???????
A non-banking institution which is a company
and which has its principal business of
receiving deposits under any scheme or
arrangement or any other manner, or lending in
any manner is also a non-banking financial
company (Residuary non-banking company).
A non-banking institution which is a company
and which has its principal business of
receiving deposits under any scheme or
arrangement or any other manner, or lending in
any manner is also a non-banking financial
company (Residuary non-banking company).
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10. Category A NBFC
A company
incorporated under the
Companies Act, 1956
and desirous of
commencing business
of non-banking financial
institution
It is mandatory that
every NBFC should be
registered with RBI to
commence or carry on
any business of non-
banking financial
institution as defined in
clause (a) of Section 45 I
of the RBI Act, 1934.
A company
incorporated under the
Companies Act, 1956
and desirous of
commencing business
of non-banking financial
institution
1. The Company should have
a minimum net owned fund of
Rs 5 crore. ( & Rs. 2 crore for
north eastern states)
2. The company is required to
submit its application for
registration in the prescribed
format along with necessary
documents for RBI’s
consideration
It is mandatory that
every NBFC should be
registered with RBI to
commence or carry on
any business of non-
banking financial
institution as defined in
clause (a) of Section 45 I
of the RBI Act, 1934.
RBI issues Certificate of
Registration after satisfying
itself that the conditions are
satisfied
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11. For RBI Registration- Category
B NBFC
P
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N
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M
S
P
R
U
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P
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12. Registration Process
1. Application for Registration in the
prescribed Form containing:
- Identification Particulars,
- Capital Funds & Risk Assets,
- Information on Management.
2. MOA, AOA, Board Resolution,
Accounts and Business Plan.
1. Application for Registration in the
prescribed Form containing:
- Identification Particulars,
- Capital Funds & Risk Assets,
- Information on Management.
2. MOA, AOA, Board Resolution,
Accounts and Business Plan.
1. Application for Registration in the
prescribed Form containing:
- Identification Particulars,
- Capital Funds & Risk Assets,
- Information on Management.
2. MOA, AOA, Board Resolution,
Accounts and Business Plan.
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13. Registration Process-vetting
 Management Background
 BOD
 Executive
 Funding
Track record of other NBFCs in the group
CR from Bankers
Interview of promoters/directors
Definitive business plan
Auditor’s certificate
 Management Background
 BOD
 Executive
 Funding
Track record of other NBFCs in the group
CR from Bankers
Interview of promoters/directors
Definitive business plan
Auditor’s certificate
 Management Background
 BOD
 Executive
 Funding
Track record of other NBFCs in the group
CR from Bankers
Interview of promoters/directors
Definitive business plan
Auditor’s certificate
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14. Registration Process- rejection &
appeal
Appeal against the RBI Order rejecting the Application to the
Central Government, Ministry of Finance
1. To dispose of financial assets within 3 years from date of
rejection/cancellation.
2. If deposit taking –
i) repay deposits and
ii) report outstanding position on monthly basis (NBS-4)
3. Take up Other objects & change the name
4. Voluntary winding up
Appeal against the RBI Order rejecting the Application to the
Central Government, Ministry of Finance
1. To dispose of financial assets within 3 years from date of
rejection/cancellation.
2. If deposit taking –
i) repay deposits and
ii) report outstanding position on monthly basis (NBS-4)
3. Take up Other objects & change the name
4. Voluntary winding up
Appeal against the RBI Order rejecting the Application to the
Central Government, Ministry of Finance
1. To dispose of financial assets within 3 years from date of
rejection/cancellation.
2. If deposit taking –
i) repay deposits and
ii) report outstanding position on monthly basis (NBS-4)
3. Take up Other objects & change the name
4. Voluntary winding up
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15. Continuance of business of
NBFC
- Certificate from statutory auditors to be
submitted to RBI every year.
- Confirming that it continue to undertake
business of NBFI and therefore requires to
hold CoR granted by RBI.
- Certificate from statutory auditors to be
submitted to RBI every year.
- Confirming that it continue to undertake
business of NBFI and therefore requires to
hold CoR granted by RBI.
- Certificate from statutory auditors to be
submitted to RBI every year.
- Confirming that it continue to undertake
business of NBFI and therefore requires to
hold CoR granted by RBI.
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16. Change in control/management
of a NBFC
For all NBFCs:
 public notice 30 days before effecting the sale or transfer,
 in two newspapers one English and local vernacular
language,
 jointly by NBFC, transferor and transferee,
 within seven days of publication, intimation to RBI
For Deposit Accepting NBFCs
- Prior approval of RBI
- Obligation towards deposit holders
For all NBFCs:
 public notice 30 days before effecting the sale or transfer,
 in two newspapers one English and local vernacular
language,
 jointly by NBFC, transferor and transferee,
 within seven days of publication, intimation to RBI
For Deposit Accepting NBFCs
- Prior approval of RBI
- Obligation towards deposit holders
For all NBFCs:
 public notice 30 days before effecting the sale or transfer,
 in two newspapers one English and local vernacular
language,
 jointly by NBFC, transferor and transferee,
 within seven days of publication, intimation to RBI
For Deposit Accepting NBFCs
- Prior approval of RBI
- Obligation towards deposit holders
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17. Concerned Areas
 A large number of NBFCs are working without
registration:
 Companies working without registration and
 Companies rejected by RBI still operating.
 Penalties:
 Imprisonment 1 to 5 years and
 Fine of Rs. 1 lakh to 5 lakhs.
 A large number of NBFCs are working without
registration:
 Companies working without registration and
 Companies rejected by RBI still operating.
 Penalties:
 Imprisonment 1 to 5 years and
 Fine of Rs. 1 lakh to 5 lakhs.
 A large number of NBFCs are working without
registration:
 Companies working without registration and
 Companies rejected by RBI still operating.
 Penalties:
 Imprisonment 1 to 5 years and
 Fine of Rs. 1 lakh to 5 lakhs.
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18. RBI Registration: Value Addition
Briefing Client
Filling in Relevant Applications
Extensive Experience
Value Addition by
ECA
Stage
Short Turn-around timeFilling in Relevant Applications
Filing Applications with the RBI/ROC
Obtaining client approval for the completed
applications
In-depth Understanding
Professional Expertise
Short Turn-around time
Liaisoning
Obtaining the Registration
Reliable contacts
High success rate
Continued SupportFiling Returns
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20. Consult the Experts-ECA
 There can be different kinds of NBFCs
and legal structures for doing
finance/credit/loan/raising funds from
public business in India, however, a
company should look into the options
which is best suited for their business.
 To know the further details about
NBFC/MFI/Nidhi Company and other
legal aspects of financial institutions,
contact us at admin@equicorplegal.com
 There can be different kinds of NBFCs
and legal structures for doing
finance/credit/loan/raising funds from
public business in India, however, a
company should look into the options
which is best suited for their business.
 To know the further details about
NBFC/MFI/Nidhi Company and other
legal aspects of financial institutions,
contact us at admin@equicorplegal.com
www.equicorplegal.com

22. www.equicorplegal.com

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