FAQs on NBFC Registration
1. What does conducting financial activity as “principal business” mean?
When a company’s financial assets constitute more 50% of the total assets and income from financial assets constitute more than 50% of the total income. If a company meets the both condition mandatory required as NBFC by RBI.
2. NBFCs are doing functions similar to banks. What is difference between banks & NBFCs?
NBFC offers almost everything as banks do, performing financial intermediation in a variety of ways, making loans, accepting deposits, and advances, leasing, hire purchase, etc. NBFC can raise funds from the public, directly or indirectly, and can freely lend them to ultimate spenders.
3. What is the maximum limit to accept deposits from public?
W.e.f from 31-03-2016, NBFC can accept maximum 1.5 times of Net owned fund.
4. Is it necessary that every NBFC should be registered with RBI?
In accordance with section 45-1A of the RBI Act. 1934, for doing lending and accepting deposits from public every such company requires prior approval from the Reserve of bank of India.
5. What are the requirements for registration with RBI?
The Minimum net owned fund of NBFC should be not less than Rs. 200 Lakh and principal objectives making loans, accepting deposits, and advances, leasing, hire purchase, etc. NBFC can raise funds from the public, directly or indirectly.
6. What are banking activities banned for NBFC?
NBFC cannot accept demand deposits and cannot issue cheque drawn on itself.
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|Governing Laws||RBI Act. 1934||Companies Act. 2013||MSCS Act. 2002||RBI Act. 1934|
|Recommended for||Commercial Banking Business||Member based
Mutual benefit society
|Non-Commercial Banking and NPO||Poor and lower income group.|
|Initial Capital||Minimum Rs. 2 Crore||Rs. 10 Lakh||For General credit Rs. 2 Lakh and for Urban bank Rs. 4 Crore||Minimum Rs. 5 Crore.|
|Loan Limit||No.||No.||No.||Maximum Rs. 50,000|
|Members||7 / 2||7 at the time of registration and after registration min 200.||Min 50 from at least 2 state. In total 100||7 / 2|
|Operations||PAN India||PAN India||In a District or state||PAN India|
|Registration time||Maximum 90 Working days||Maximum 20 working days||Maximum 120 working days||Maximum 180 Working days|
|Registering Authority||ROC & RBI||Registrar of Companies||State Government and Central Govt.||ROC & RBI|
|Deposits||No.||Yes. From only its members||Yes. freely from public with certain limitation||No.|
|Loan||To Everyone||To Members only||To Everyone||For lower income group|
|Funding||From Members and FDI||From Members only||From Members and Public||From Members and Governments|