Prominent Dealing in NBFC in Chennai

  • NBFC Registration or Restructuring
  • Apply CoR
  • Prepare Business Plan
  • Easier Market Analysis
  • Full Assistance in Getting NBFC License
  • Legal Advisory before and after incorporation
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NBFC

NBFC License India provides all services related to NBFCs and its registration all over in India. Whether you are in Chennai, Delhi, Gurgaon, and Mumbai or anywhere else in India.

An NBFC is a company that is engaged in the business of giving loans and advances, acquisition of shares, stocks, bonds, debentures and Government securities, including local authority bonds or other securities which are marketable in nature, leasing, hire-purchase, insurance business, chit-fund business, etc.

The business is similar to that of banks but NBFCs differ from the banks. Because though they deal with money, yet NBFCs do not require a full bank license.

NBFCs can accept deposits from the public under any scheme of arrangement or any other manner and lend the money to their clients in the form of leasing, hire purchase, etc.

NBFCs are registered under the Companies Act, 2013. Every NBFC in Chennai must also be registered with the Reserve Bank of India to commence and carry on their business of non-banking financial nature.

NBFC Projects in Chennai

Include:


  • Chit business
  • Hire-purchase
  • Lease business
  • Insurance business
  • Mortgage guarantee
  • Investment Company
  • Asset finance and loan finance
  • Non-operating financial holding
  • Infrastructure Finance Company
  • Acquisition of shares/stocks/securities/bonds/debentures issued by Government or local authority or other similar marketable securities,

Do not Include:


  • Agriculture activity,
  • Industrial activity,
  • Purchase or sale of any goods (other than securities) or
  • Providing any services related to the sale/purchase/construction of an immovable property.

Features of NBFC in Chennai

Can Cannot
A company registered under the Companies Act, 2013(1956). Cannot offer interest rates that are higher than the ceiling rate prescribed by RBI from time to time.
Registration from the RBI is a must, to carry on the business. Are not a part of the payment and settlement system and cannot issue cheques drawn on itself.
Have a net owned fund of Rs. 200 lakhs. Cannot offer higher interest rates, gifts, incentives and any other additional benefits to the depositors.
Can accept, renew public deposit for minimum 12 months and maximum 60 months. Cannot accept demand deposits.
Deposits with NBFCs are not insured
Repayment of deposits by NBFC is not guaranteed by RBI

Categories of NBFCs

  • in terms of the type of liabilities –
    1. Deposit or
    2. Non-Deposit taking NBFCs.
  • the kind of activity they conduct:
    1. Loan Company (LC),
    2. Investment Company (IC),
    3. Infrastructure Debt Fund (NBFC-IDF),
    4. Mortgage Guarantee Companies (MGC),
    5. Asset Finance Company (NBFC-AFC),
    6. Infrastructure Finance Company (NBFC-IFC),
    7. Systemically Important Core Investment Company (CIC-ND-SI),
    8. Non-Operative Financial Holding Company (NOFHC),
    9. Micro Finance Institution (MFI), and
    10. Factors (NBFC-Factors), etc.

What is Required to Register NBFC in Chennai

According to Section 45 (1A) of the RBI Act, below conditions must be fulfilled for a company to be registered as an NBFC:

  • Registration

The entity should be registered under the Companies Act 2013 or the previous Companies Act 1956. As a private or a public limited company. NBFC Registration in Chennai.

  • Director’s Qualifications

Not less than 1/3rd of the Directors must have around 10 years of experience in Finance, and be a full-time Director.

  • Unique Business Plan

The company must have a comprehensive business plan laid out for operations for the next 5 years.

  • Net Owned Fund (NOF)

It must have at least Rs. 2 crore as its minimum NOF. Only equity paid-up share capital is considered and not the preference share capital. And it should not be a borrowed fund. The minimum NOF is different for specialized NBFCs such as NBFC-MFIs, NBFC Factors, and NBFC-CICs.

  • Honest Credit History

The CIBIL score and credit records of the company, the Directors and the members must be clear. They must have no write-offs or intentional defaults of the repayment of loans to NBFC/Bank.

  • FDI Compliance 

In case the entity is expecting investment from abroad, it should comply with the FEMA Act provisions.

NBFC Registration in Chennai

After a company has been incorporated and the minimum NOF acquired, you need to follow the below procedure to get it registered as an NBFC:
    1. An application form is to be submitted online along with the required documents. Thereby, a Company Application Reference Number (CARN) gets generated. This reference number is used during all future enquiries and communications.
    2. The hard copy of the documents and the application form that were submitted above are to be sent to the Regional Office of the RBI.
    3. For the Chennai region, the office is situated at Fort Glacis, No. 16, Rajaji Salai, Chennai – 600 001. This has jurisdiction over the State of Tamil Nadu, Union Territory of Puducherry, Bangalore, Hyderabad and Thiruvanathapuram.
    4. Once the submitted documents are verified and approved, the regional office will forward the application to the central office of the RBI. There the application and the documents are reviewed thoroughly and a check is conducted about the past performance of the company.
    5. If the company is meeting all the terms and conditions specified in Section 45-I A of the RBI Act, the License will be granted to you for the Non-Banking Financial Company.
Do take note that the required minimum capital has to be kept in a deposit account, free from any claims. Generally, such amount is maintained in an FD (Fixed Deposit). RBI will verify this amount, as deposit of the company with the concerned bankers.

Documents Required for NBFC License

  • PAN Card
  • Aadhaar card
  • Proofs of directors and partners
  • Company Incorporation Certificate
  • Address proof of the company
  • Bank statement of the company
  • Company’s Audited Balance Sheet and Profit & Loss Account
  • Income tax registration – TAN
  • GST registration
  • Memorandum of Association (MoA)
  • Article of Association (AoA)
  • Brief details about business activity
  • Auditors report for the entire period of the company’s existence, or for the last 3 years, whichever is less
  • Banker’s report representing details of deposits and loan balances as on the date of application and the conduct of the account

Compliance Requirements for NBFCs after CoR

Once the NBFC has been registered in Chennai, you need to fill-up certain provisions, under the Companies Act. As also, the guidelines, circulars, and notifications, from the RBI, issued in the public domain frequently, are to be followed.

    • Appointment of Statutory Auditor (CA with 5+ years of experience),
    • Statutory Audit,
    • Tax Audit,
    • GST Return Filing,
    • Income Tax Return Filing,
    • ROC Return Filing,
    • All other Compliances/Returns required by a competent authority.

Compliances for NBFCs by RBI

  • COSMOS Registration,
  • C-KYC Registration,
  • CERSAI Registration,
  • Adoption of Fair Practice Code,
  • Compliance of KYC Anti-money Laundering,
  • FIU-IND Registration,
  • CIC Registration,
  • Filling of NBS-9 by using the Online Platform of RBI (COSMOS),
  • Secretarial compliances.

Penalty of Non-Compliance to RBI Regulations

RBI has the authority to take strict regulatory action if a company has not obtained a Certificate of Registration (CoR) of NBFC, but still is running a business of lending, accepting deposits or making investments. RBI can impose a heavy penalty or fine. Or the entity can even be prosecuted in a court of law. RBI invites the general public, to report any entity which does non-banking financial activity but does not figure in the list of authorized NBFC in Chennai on the RBI website. Appropriate action will be taken for infringement of the provisions of the RBI Act, 1934. Additionally, RBI analyzes market intelligence reports, complaints, and exception reports from statutory auditors of the companies, information received through SLCC meetings, etc. to find out companies that are in violation of the norms. This information is also shared with other financial sector regulators and enforcement agencies in the State Level Coordination Committee Meetings.

Why Choose NBFCLicenseIndia

The procedure of obtaining the CoR from the RBI may look simple but is far more complex. All details must be filled with extra care such as banker’s reports, business plan, the proofs of the directors, etc. Special attention is to be put in to ensure that the application and the documents should clear the high parameters set by the RBI.

At NBFC License India, we take care to address the critical issues of outlining company policies, business strategies, drafting MoA & AoA, etc. And NBFC License India can help you during all these complex challenges.

We ensure that you are not bothered to make follow-ups with the RBI for the status of the application.

Our support also extends to:

  • New Registrations
  • Meeting RBI Compliance
  • Internal Audit Services
  • Mergers/Demergers
  • Takeovers
  • Business Re-structuring
  • Setting up Business Plans & Policies
  • Contract Drafting
  • Approval for Management Change from RBI
  • Designing Financial Services
  • Marketing Digital Loan Products