NON BANKING FINANCIAL COMPANY
Nonbank financial companies (NBFCs), also known as nonbank financial institutions (NBFIs), are financial institutions that offer various banking services but do not have a banking license. Generally, these institutions are not allowed to take traditional demand deposits—readily available funds, such as those in checking or savings accounts—from the public. This limitation keeps them outside the scope of conventional oversight from federal and state financial regulators.
- Nonbank financial companies (NBFCs), also known as nonbank financial institutions (NBFIs) are entities that provide certain bank-like financial services but do not hold a banking license.
- NBFCs are not subject to the banking regulations and oversight by federal and state authorities adhered to by traditional banks.
- Investment banks, mortgage lenders, money market funds, insurance companies, hedge funds, private equity funds, and P2P lenders are all examples of NBFCs.
- Since the Great Recession, NBFCs have proliferated in number and type, playing a key role in meeting the credit demand unmet by traditional banks.
Documents Required for NBFC Registration With RBI
- Certificate of Company Incorporation.
- Detailed information about the management along with a brochure of the company.
- A copy of PAN/Corporate Identity Number (CIN) of the company.
- Documents related to the office location/address
- Certified copy of the Memorandum of Association (MoA) and Articles of Association (AoA).
- List of Directors’ profile duly signed by each director must be attached.
- CIBIL/credit reports of the Directors of the Company are required.
- A copy of the board resolution which certifies that the company has not carried out or stopped NBFC activity and will not carry any until the registration from RBI is granted.
- A board resolution on ‘Fair Practices Code’ is to be passed and a certified copy of the same is to be submitted.
- Certificate issued by the statutory auditor stating that the company is not holding the public deposit and does not accept it as well.
- Certificate specifying owned funds as on the date of the application from the Statutory Auditor is required.
- Information regarding the bank account, balances, loans, credits, etc. is to be furnished.
- If applicable, audited balance sheet and profit and loss statement along with the directors and auditors report of the preceding three years has to be submitted.
- Self-certified copy of the bank statement and Income Tax Returns is required.
- Information detailing the company’s future plan, generally for the next 3 years, along with the projection of balance sheets, cash flow statement and income statement.