Incorporation of a NBFC

NBFCs are financial institutions that provide banking services such as loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by the government or local authority or other marketable securities, leasing, hire-purchase, insurance business, etc., but they do not hold a banking license like traditional banks. The incorporation of Non-Banking Financial Companies (NBFCs) in India is governed by the Reserve Bank of India (RBI) under the provisions of the Reserve Bank of India Act, 1934. The minimum net owned capital required for incoroparation of a NBFC is 10 Crores.

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  • Flexibility in Financial Services: NBFCs have the flexibility to offer a wide range of financial services such as lending, investment, asset financing, wealth management, and more. This allows NBFCs to cater to specific customer needs and operate in niche markets.
  • Easier Access to Credit: NBFCs play a vital role in providing credit to individuals and businesses, especially those who may have difficulty accessing loans from traditional banking institutions. NBFCs often have less stringent eligibility criteria and can be more receptive to providing loans to borrowers with lower credit scores or limited collateral.
  • Support for Economic Growth: NBFCs contribute significantly to the Indian economy by promoting financial inclusion, particularly in rural and underserved areas. They extend financial services to segments that may not have access to formal banking services, thereby stimulating economic growth and development.
  • Quick Decision-Making: NBFCs generally have more streamlined decision-making processes compared to traditional banks. This allows them to respond quickly to customer requirements and adapt to changing market conditions swiftly.
  • Lower Regulatory Requirements: While NBFCs are regulated by the Reserve Bank of India (RBI), they typically have less stringent regulations compared to banks. This provides NBFCs with more operational flexibility and allows them to adapt to market dynamics more efficiently.
  • Fostering Innovation: NBFCs often leverage technology and digital platforms to provide innovative financial solutions. This enables them to reach a broader customer base and offer services through convenient and user-friendly channels, including mobile apps and online platforms.
  • Diversification of the Financial Sector: NBFCs contribute to the diversification of the financial sector by providing an alternative to traditional banking institutions. This enhances competition, promotes efficiency, and ultimately benefits consumers by offering them more choices and better services.

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  • Copy of MOA and AOA.
  • Certificate of company incorporation.
  • Information about the management along with the brochure of the company.
  • List of directors’ profile duly signed by each director.
  • CIBIL/credit reports of the Directors of the Company.
  • Address proof supporting office location.
  • A board resolution on the ‘Fair Practices Code’ is to be passed and the same copy should be attached along with the documents.
  • It is issued by the auditor stating that the company does not hold the public deposit and does not accept it as well.
  • A scan copy of the board resolution certifying that the company has not carried out or abruptly stopped any NBFC activity and will not carry any until the registration from RBI is granted.
  • Information regarding the bank account, balances, loans, credits, etc. of the directors.
  • The Certificate specifies owned funds as on the date of the application from the Statutory Auditor.
  • Audited balance sheet and profit and loss statement along with the directors and auditors report of the preceding three years.
  • Self-certified copy of the bank statement and Income Tax Returns.
  • Information specifying the company’s future plan, generally for the next 3 years, along with the projection of balance sheets, cash flow statement and income statement.


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