Registering a Non-Banking Financial Company (NBFC) involves several steps and compliance requirements. In India, the registration process is governed by the Reserve Bank of India (RBI). Here is a general guide on how to register an NBFC:
- Preparation and Planning:
- Define the business model and the financial services you intend to provide.
- Ensure that the proposed activities comply with the regulatory framework for NBFCs.
- Incorporate a Company:
- Register a company with the Ministry of Corporate Affairs (MCA) under the Companies Act, 2013.
- Choose an appropriate company structure (Private Limited, Public Limited, etc.).
- Minimum Net Owned Funds (NOF):
- Ensure that the company has the minimum required Net Owned Funds (NOF) as per RBI regulations. NOF is the owned fund minus the investment in shares of subsidiaries, companies in the same group, and book value of debentures, bonds, outstanding loans and advances including hire purchase and lease finance made to and deposits with subsidiaries and companies in the same group.
- Appoint Key Personnel:
- Appoint qualified and experienced directors and key management personnel as required by RBI.
- Submit Application to RBI:
- Prepare and submit the application to the Regional Office of the RBI through the online portal of the RBI for the Certificate of Registration (COR).
- Provide all necessary documents, including details of the company, its directors, business plan, and financial projections.
- Compliance with RBI Regulations:
- Ensure compliance with the various regulations specified by RBI for NBFCs, such as prudential norms, capital adequacy, and other operational guidelines.
- Fit and Proper Criteria:
- Ensure that the directors and key management personnel meet the “fit and proper” criteria set by RBI.
- Verification and Inspection:
- The RBI may conduct a verification and inspection of the documents submitted.
- Certificate of Registration (COR):
- If the RBI is satisfied with the application, they will issue the Certificate of Registration (COR) allowing the company to commence operations as an NBFC.
- Post-Registration Compliance:
- After obtaining the COR, ensure ongoing compliance with RBI regulations, including submission of periodic reports and financial statements.
- Reporting Requirements:
- Comply with various reporting requirements, including statutory audit reports, quarterly returns, and other information as required by RBI.
It’s important to note that the registration process and requirements may evolve, so it’s recommended to check the latest guidelines and regulations provided by the Reserve Bank of India or consult with legal and financial professionals experienced in NBFC registration.