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EquiCorp AssociatesAdvocates & Solicitors

NBFC Registration in IndiaNBFC Registration in India

www.equicorplegal.com

Indian Financial System

Financial Intermediaries Financial Markets FinancialAssets/Instruments

Banks NBFCMutualFunds

InsuranceOrganization

Money Market Capital/Securities MarketBanks NBFCMutualFunds

InsuranceOrganization

Leasing Companies

Hire-Purchase/Consumer FinanceCompanies

Housing Finance Companies

Venture Capital Funds

Merchant Banking Organization

Credit Rating Agencies

Factoring and Forfeiting Org.,

Stock broking firms

Depositories

Money Market Capital/Securities Market

Primary Market SecondaryMarket

Primary/Direct Indirect Derivatives

Leasing Companies

Hire-Purchase/Consumer FinanceCompanies

Housing Finance Companies

Venture Capital Funds

Merchant Banking Organization

Credit Rating Agencies

Factoring and Forfeiting Org.,

Stock broking firms

Depositories

Derivatives

Equity

Preference

Debentures

Innovative debtinstruments

Forward

Futures

OptionsConvertible Debentures

Non- ConvertibleDebentures

Secured Premium Notes

Warrants

Mutual Fund-units

Security Receipts

Pass ThroughCertificates


Post-1991 Phase Organization of the IndianFinancial System

Privatization offinancialinstitution

Banks

Mutual-Fund

InsuranceCompanies

Reorganization of Structure

DFIs/PFIs Banks NBFCs Mutual-funds CapitalMarket

Money-Market

Privatization offinancialinstitution

Banks

Mutual-Fund

InsuranceCompanies

CapitalMarket

Money-Market

PrimaryStock-exchange

Investor Protection:

SEBI

Prudential Norms:

Credit/advanceportfolio

InvestmentPortfolio

Capital adequacy

Prudential Norms:

Credit/advanceportfolio

InvestmentPortfolio

Capital adequacy

ExposureNorms:

Securitisation,Asset

ReconstructionAnd Enforcement

Of SecurityInterest

Asset-LiabilityManagement Credit Risk

ManagementCountry RiskManagement


NBFC- AnIntroduction


NBFC Growth Factors


Classification of NBFC’sEquipment

LeasingCompany

Residualnon banking

company

Mutualbenefit

financialCompany

Residualnon banking

company

Microfinance

companies/institutions

LoanCompany

Mutualbenefit

financialCompany

Microfinance

companies/institutions

Hirepurchasefinance

company

Investmentcompany

LoanCompany


Classification of NBFC’s

Asset Finance Companies Investment Companies

NBFC since2006

Loan Companies Infrastructure FinanceCompanies


Classification of NBFC’scontd.


Can NBFC receivedeposit???????

A non-banking institution which is a companyand which has its principal business ofreceiving deposits under any scheme orarrangement or any other manner, or lending inany manner is also a non-banking financialcompany (Residuary non-banking company).

A non-banking institution which is a companyand which has its principal business ofreceiving deposits under any scheme orarrangement or any other manner, or lending inany manner is also a non-banking financialcompany (Residuary non-banking company).


Category A NBFCA companyincorporated under theCompanies Act, 1956and desirous ofcommencing businessof non-banking financialinstitution

It is mandatory thatevery NBFC should beregistered with RBI tocommence or carry onany business of non-

banking financialinstitution as defined inclause (a) of Section 45 I

of the RBI Act, 1934.

A companyincorporated under theCompanies Act, 1956and desirous ofcommencing businessof non-banking financialinstitution

1. The Company should havea minimum net owned fund ofRs 5 crore. ( & Rs. 2 crore fornorth eastern states)2. The company is required tosubmit its application forregistration in the prescribedformat along with necessarydocuments for RBI’sconsideration

It is mandatory thatevery NBFC should beregistered with RBI tocommence or carry onany business of non-

banking financialinstitution as defined inclause (a) of Section 45 I

of the RBI Act, 1934.

RBI issues Certificate ofRegistration after satisfyingitself that the conditions aresatisfied


For RBI Registration- CategoryB NBFC

PRUDENTIAL

NORMS

PRUDENTIAL

NORMS

PRUDENTIAL

NORMS


Registration Process

1. Application for Registration in theprescribed Form containing:- Identification Particulars,- Capital Funds & Risk Assets,- Information on Management.

2. MOA, AOA, Board Resolution,Accounts and Business Plan.






Registration Process-vetting

Management Background BOD Executive Funding

Track record of other NBFCs in the groupCR from BankersInterview of promoters/directorsDefinitive business planAuditor’s certificate






Registration Process- rejection &appeal

Appeal against the RBI Order rejecting the Application to theCentral Government, Ministry of Finance

1. To dispose of financial assets within 3 years from date ofrejection/cancellation.

2. If deposit taking –i) repay deposits andii) report outstanding position on monthly basis (NBS-4)

3. Take up Other objects & change the name

4. Voluntary winding up












Continuance of business ofNBFC

- Certificate from statutory auditors to besubmitted to RBI every year.

- Confirming that it continue to undertakebusiness of NBFI and therefore requires tohold CoR granted by RBI.






Change in control/managementof a NBFC

For all NBFCs:

public notice 30 days before effecting the sale or transfer,

in two newspapers one English and local vernacularlanguage,

jointly by NBFC, transferor and transferee,

within seven days of publication, intimation to RBI

For Deposit Accepting NBFCs

- Prior approval of RBI

- Obligation towards deposit holders

For all NBFCs:








For all NBFCs:









Concerned Areas A large number of NBFCs are working without

registration:

Companies working without registration and

Companies rejected by RBI still operating.

Penalties: Imprisonment 1 to 5 years and Fine of Rs. 1 lakh to 5 lakhs.

A large number of NBFCs are working withoutregistration:




A large number of NBFCs are working withoutregistration:





RBI Registration: Value Addition

Briefing Client

Filling in Relevant Applications

Extensive Experience

Value Addition byECA

Stage

Short Turn-around timeFilling in Relevant Applications

Filing Applications with the RBI/ROC

Obtaining client approval for the completedapplications

In-depth Understanding

Professional Expertise

Short Turn-around time

Liaisoning

Obtaining the Registration

Reliable contacts

High success rate

Continued SupportFiling Returnswww.equicorplegal.com

Consult the Experts-ECA

There can be different structures for raisingfunds from Public or giving loans, however,company should look into the options whichis best suited for their business.

To know the further details aboutNBFC/MFI/Nidhi Company and other legalaspects of financial institutions, contact us [email protected]

There can be different structures for raisingfunds from Public or giving loans, however,company should look into the options whichis best suited for their business.

To know the further details aboutNBFC/MFI/Nidhi Company and other legalaspects of financial institutions, contact us [email protected]


Equi Corp Associates, Advocates & Solicitors1st Floor, NBBC, Inox Towers, Tower-B, Plot No.17,

Sector-16 A, Film City, Noida-201301T: +91 1204797509

Mobile: +919958709189E-mail: [email protected]

Website: www.equicorplegal.com/ www.corporatelawyersdelhi.comBlog: http://equicorplegal.blogspot.in/

Equi Corp Associates, Advocates & Solicitors1st Floor, NBBC, Inox Towers, Tower-B, Plot No.17,

Sector-16 A, Film City, Noida-201301T: +91 1204797509

Mobile: +919958709189E-mail: [email protected]

Website: www.equicorplegal.com/ www.corporatelawyersdelhi.comBlog: http://equicorplegal.blogspot.in/

equicorp associates advocates & solicitors registration in... · definitive business plan...

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