Procedure for registration of Non-Banking Financial Company with RBI Licence:-
1. Register a Company
Only Companies Registered under Companies Act can apply for NBFC license to RBI, it is important to note that the main object of the NBFC company must be of to carry on a business of NBFC, so it is important to draft Memorandum and Articles of Association in line with these objects. A Company can be either be registered as Private Limited Company or Public Limited Company. At the time of formation of Company, a declaration is required to be submitted that the company will not carry out business activities unless the prescribed approval from the sectoral regulator is obtained.
2. Open Bank Account and Deposit Subscription Amount
Once the Company registration process is complete a Bank Account is required to be opened and subscription amount is required to be deposited in the companies Bank Account. Please note that promoters cannot carry out any business activity unless the license is obtained from the RBI.
3. Increase Authorised and Paid up Share Capital of the Company
As the basic required to apply RBI license is to have minimum Net owned funds of Rs. 200 Lakhs, the Company must have such capital at the time for applying for RBI Licence, to fulfil this requirement company must have this much of capital. Here we need to increase this capital of the company to Rs. 2 Crore and amend the MOA of the company accordingly. To increase the paid-up share capital of the Company the company is required to issue shares to existing shareholders or new shareholders either by way of a rights issue or private placement.
4. Make a Fixed Despot of Rs. 2 Core with the Bank and obtain Fixed Despot Certificate
After Increase of paid-up share capital, the company will be having funds of Rs. 2Crore, that entire amount should be deposited with the Bank in the form of Fixed Deposit.
5. Making required set of all the Documents to Submit Online and Offline application :
Certified copies of Certificate of Incorporation and Certificate of Commencement of Business in case of public limited companies.
Certified copies of extract of only the main object clause in the MOA relating to the financial business.
Board resolution stating that:
a) the company is not carrying on any NBFC activity/stopped NBFC activity and will not carry on/commence the same before getting registration from RBI
b) the UIBs in the group where the director holds substantial interest or otherwise has not accepted any public deposit in the past /does not hold any public deposit as on the date and will not accept the same in future
c) the company has formulated “Fair Practices Code” as per RBI Guidelines
d) the company has not accepted public funds in the past/does not hold any public fund as on the date and will not accept the same in the future without the approval of Reserve Bank of India
e) the company does not have any customer interface as on date and will not have any customer interface in the future without the approval of Reserve Bank of India
Copy of Fixed Deposit receipt & bankers certificate of no lien indicating balances in support of NOF
Banker’s report in respect of applicant company, its group/subsidiary/associate/holding company/related parties, directors of the applicant company having substantial interest in other companies The Banker’s report should be about the dealings of these entities with these bankers as a depositing entity or a borrowing entity.
Note: Please provide bankers report from all the bankers of each of these entities and provide the report for all the entities. The details of deposits and loans balances as on the date of application
and the conduct of the account should be specified.