The process of NBFC takeover has been simplified by the RBI. NBFC takeover is an easier process in comparison to NBFC fresh registration. In NBFC takeover, firstly acquirer of NBFC should conduct due diligence and overview the financials of the target company. Under this, MOU is signed with advance money.
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Non-Banking Financial Company, commonly known as NBFC, is a form of Company registered underneath the Companies Act, 2013, which is involved in numerous financial services like providing loans, supporting credit facilities, assets financing, currency exchange, lending, and many more functions.
An NBFC registration in India is done as per the rules and regulations of the RBI Act.
As per Section 45-1 (c) of the Reserve Bank of India Act, 1934, any non-banking company providing any financial services are considered as NBFC. Ministry of Corporate Affairs and RBI governs the NBFCs. Non-Banking Financial Company is a financial institute that suggests banking services, but does not have a banking license. A Non-Banking Institution has the prime business of getting deposits under any scheme or arrangement or in any other prescribed manner. Such deposits and can be attained in one lump sum or installments by way of contribution.
Some NBFCs does not require Registration from the RBI they are-
NBFC can perform activity just like any normal bank. The activities of banks and NBFCs are moreover similar. The financial intermediaries are regulated by the Companies Act, 2013, and the Banking Regulation Act, 1949. The control is under the Reserve Bank of India. The difference is as follows: -
The specific purpose of NBFCs are-
As per Section 45(1A) of the RBI Act, any individual or Company eager to start a loan or investment business in India needs to register a company that meets the requirements prescribed for NBFCs. They are-
The directors should have knowledge and experience regarding finance, credit and banking
The Company should have a detailed business plan for the next five years
Shareholders must have two crores as the Net Owned Fund. Investment should not be borrowed fund
The directors and shareholders must not have any write-offs
The Net Owned Fund must be tax paid, and all legal compliance of the management of the Company must be clean and legally up to standard.
Deposit-taking NBFC
Non-deposit taking NBFC
The steps in the NBFC registration process are-
The documents required for NBFC registration are-
The post-registration compliances are as follows-
Based on Activities-
It is known as a loan company, having ICC license you can lend and finance
lenders and Borrowers work together and Manages funds
Financial Info regarding service provider
Provides credit and loans to the delicate section of the societies
Investment in stocks for Debt in the same group of Company
Long term debt to Infrastructure companies
Receivable Financing or Bill Discounting
Providing Mortgage guarantee services
Created for Banking License
If a company has effectively obtained online NBFC Registration, then it’s obligatory to fulfill all the NBFC annual compliances. Where NBFC is failing to accomplish the contracts, NBFC becomes liable for the hefty penalties. The penalties can even lead to the cancellation of the Registration.
Annual compliance of NBFC has to be filed within six months by any NBFC after attaining the Registration from the RBI. There are mainly two categories of NBFCs-
NBFCs play a significant role in the development of the infrastructure, creation of wealth, and economic development. NBFC registration in India is a complex process, and the government has encouraged Registration since they have a vital role in channelizing and mobilizing the financial resources in a precise direction. For incorporating NBFC and getting its certification, the Company should comply with all the guidelines related to the registration process.
A Work Process for NBFC Company Registration.
Client information is entered into our database.
After order generation payment is received from client.
Required documents are collected from client.
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