A corporation organized under the Companies Act of 2013 or 1956 is referred to as a Non-Banking Financial Corporation. A non-banking company that does the business of a financial institution shall be an NBFC, according to section 45-I (c) of the RBI Act. Additionally, it specifies that the NBFC must be active in the loan and advance business and the acquisition of stocks, equities, debt, and other marketable securities issued by the government or any local authority. NBFC license consulting is essential to start NBFC.
The steps for incorporating an NBFC
• A corporation must first be incorporated as a Private Limited or Public Limited Company under the Companies Act 2013 or have an existing registration under the Companies Act 1956.
• The Company should have a minimum net owned fund of Rs. 2 crores.
• A third of the Directors must have financial industry knowledge.
• The company should have clean CIBIL records.
• A thorough five-year business plan is required of the corporation.
• The business must abide by FEMA’s regulations and capital compliance standards.
• After the aforementioned requirements have been met, the online application on the RBI website should be completed and submitted along with the necessary documentation.
• There will be a CARN Number produced.
• The Reserve Bank of India’s regional branch must also receive a hard copy of the application.
• The application will be thoroughly examined before the Company is granted the License.