The NBFC registration is achieved in accordance with the regulations of the Companies Act of 2013 and the RBI Act of 1934. It is critical to the execution of our economy's financial operations. All of the requirements outlined in Section 45-IA of the RBI Act of 1934 must be met in order to get an NBFC license.

In addition to the above-mentioned RBI compliance for NBFCs with PAN-India registration, the Master Director refers to certain further requirements issued by the RBI in Chapter IV. The Prudential Regulations are the name given to these legislation. Again, every NBFC is required to follow the following regulations:

• Company's financial leverage: All NBFCs except for the NBFC-IFC (Infrastructure Finance Company) and the NBFC-MFI (Micro Finance Institution) must retain a leverage ratio of up to 7 in any course of action.

• Accounting Investments: It is the responsibility of the NBFCs' BOD (Board of Directors) to develop and implement investment policies for the firm. For example, the criterion for classifying assets into long-term and current investments.

• Defining Policies for Call or Demand Loans: The BOD (Board of Directors) of a relevant NBFC that intends to call or demand loans must develop a policy that will be followed by the company.

• Asset classification: All NBFCs subject to the RBI Master Directorate under Chapter IV must categorise their assets as follows:

1. Standard Property

2. Assets Sub-Standard directors.

3. Doubtful properties

4. Assets Loss

• Provisioning for standard assets: Each relevant NBFC is expected to include 0.25 percent of the total outstanding provisions for standard assets.

• Multiple NBFCs: To verify the asset-size threshold of Rs 500 crores, all NBFCs applicable to the RBI Master Path under Chapter IV shall be aggregated together.

• Company balance sheet disclosures: Under Chapter IV of the RBI Master Guidance, each connected NBFC will be required to disclose separately for bad or dubious loans and investment depreciation.

• A loan secured by the company's shares is prohibited: no BFCs subject to the RBI Master Directorate under Chapter IV may take over or extend credit against their own shares.

*Get your NBFC company registration certificate at your door-step. To know more about NBFC registration fees. Connect at our website.

NBFC Registration Process

• Create a company in accordance with the Companies Act of 2013.

• Set up a capital of Rs. 2 crore / 20 million INR (Minimum capital requirement for an NBFC License)

• Creation of a Rs 2 CR Fixed Deposit with any Nationalized Bank FDI Compliance under the Foreign Exchange Management Act (FEMA) - in the event of foreign investment

• Complete the paperwork for an NBFC licence.

• Submission of all required paperwork, including with the FD receipt, to the RBI

• For the Online NBFC Registration application, go to https://cosmos.rbi.org.in.

• On the website, you may download and submit the NBFC eform.

• Take note of the SRN to keep track of the status of your form or for tracking purposes.

• Maintain a paper copy of the NBFC Registration form (indicating the online Company Application Reference Number)

• Submit the required documentation to the RBI Central Office.

If you are looking to acquire an NBFC license, Muds Management can help you in the NBFC registration process by providing assistance throughout the procedure. You can avail our NBFC registration online service at your doorstep.