Documents Required for NBFC Registration in Gurugram

Non-Banking Financial Companies (NBFCs) and commercial banks fall under India’s financial services sector umbrella. In our nation, there are other places to borrow and lend money. People who want to avoid standing in line at banks to borrow money to start their businesses have an alternative in NBFCs. The NBFCs do fundamentally distinct tasks from banks and offer various services, including loans and chit-funds. NBFCs are the most effective way to lend and borrow money in developing nations like India, where there is a constant need for short-term financing for the population living in rural areas. This post will review the Documents Required for NBFC Registration in Gurugram.

What NBFCs Do?

NBFCs or Non-Banking Financial Companies are registered under the Companies Act of 2013. These companies conduct loans, advances, hire purchases, debt, equities, currency exchange, financing assets, peer-to-peer lending, and many more business operations. NBFCs conduct their business following the rules established by the Reserve Bank of India (RBI).

According to Section 45-I(c) of the Reserve Bank of India Act, 1934, a non-banking company that operates a financial institution’s business qualifies as an NBFC. The NBFCs’ operations are likewise governed and managed by the Ministry of Corporate Affairs.

What are the Functions and Roles of NBFCs?

Non-Banking Financial Companies (NBFCs) are financial institutions that provide various financial services such as loans, leasing, and hire-purchase to individuals and businesses. Some of the functions and responsibilities of NBFCs in India include:

• Lending: NBFCs provide loans to individuals and businesses for various purposes, such as home loans, business loans, education loans, personal loans, and vehicle loans.
• Leasing: NBFCs provide leasing services, which are the leasing of equipment and assets such as cars, computers, and other office equipment.
• Hire-purchase: NBFCs provide hire-purchase services, a financing method where buyers make periodic payments and own the asset after the financing period.
• Factoring: NBFCs provide factoring services, which is the sale of receivables to a third party at a discount.
• Microfinance: NBFCs provide microfinance services to individuals and businesses who may not be eligible for traditional banking services.
• Insurance intermediation: NBFCs provide insurance intermediation services to individuals and businesses.

Documents Required for NBFC Registration have several responsibilities, including compliance with regulations, managing risk, ensuring the safety and security of customer data, providing customer support and service, and managing their financial resources effectively. They are also responsible for ensuring they have the appropriate infrastructure, systems, and processes to provide their customers with high-quality financial services. Finally, NBNCs are accountable for maintaining their reputation and building trust with their customers through transparent and ethical business practices. Documents Required for NBFC Registration.

Also, read our article on Conversion of Nidhi Company to NBFC Company

What Distinctions Exist Between Banks and NBFCs?

Like conventional banks, NBFCs can lend money and make investments. Additionally, banks and NBFCs engage in similar activities. The Banking Regulation Act of 1949 and the Companies Act of 2013 governs financial intermediaries. The Reserve Bank of India is in charge of both financial intermediaries. The following are the distinctions between financial intermediaries:

• Like banks, NBFCs cannot accept demand deposits.
• NBFCs are not a part of the settlement and payment system and cannot write checks themselves.
• The depositors of NBFCs are not eligible for the deposit insurance facility offered by the Deposit Insurance and Credit Guarantee Corporation (DICGC).

Also, read our Article on NBFC Takeover: Know the Pros and Cons, Procedure and RBI Guidelines

What Documents are Necessary for NBFC Registration in Gurugram?

The following are the documents required for NBFC registration in Gurugram:

• The company’s certificate of incorporation or proof of the start of its operations.
• The company’s management details along with the company brochure.
• A duplicate of the company’s PAN card.
• A replica of the Corporate Identity Number (CIN) of the Company.
• All documentation about the office’s address and location.
• A genuine certified copy of the company’s Memorandum of Association.
• A legitimate certified copy of the company’s articles of association (AoA).
• The company’s directors’ credit reports.
• A complete list of directors’ profiles, each of which has been individually completed and signed.
• A copy of the Board resolution attesting that the Company has ceased all NBFC operations and will not resume such operations until RBI registration is granted.
• A self-certified copy of your income tax returns and your bank statement.
• A complete account summary, including balances, loans, and credits.
• A certified copy of the board’s “Fair Practices Code” resolution.
• A statement from the company’s Statutory Auditor confirming that it does not keep any public deposits and does not accept them.
• A statement from the Statutory Auditor detailing the Company’s assets as of the application date.
• CIBIL statistics for the company’s directors.
• A copy of the record detailing the company’s initial funding source.
• The company’s three most recent financial statements, including the balance sheet, the profit and loss statement, and the director’s report.
• The company’s projected cash flow statement, income statement, balance sheet, and detailed description of its plan for the next three years.

What Is the NBFC Registration Process in Gurugram?

The following are the Documents Required for the NBFC registration process:

• Submit a company incorporation application
• According to the Companies Act of 2013, the applicant must register as a Public or Private Company. According to the 2013 Companies Act, the Company must be registered with the Ministry of Corporate Affairs (MCA).
• COSMOS Application Submission

• The application should be submitted through COSMOS (Cluster of Systems of Metadata for Official Statistics), a website operated by the RBI.
• The applicant must send a physical copy of the application to the regional office of the Reserve Bank of India (RBI) in addition to the online application form and the necessary supporting documentation.

• Decide Whether to Register a Company

• The COSMOS (Cluster of Systems of Metadata for Official Statistics) application’s login page will prompt applicants to select the Company Registration tab once they have accessed the RBI website.
• The applicant should select the COSMOS (Cluster of Systems of Metadata for Official Statistics) Company Registration application and continue.

• Form Downloading

• A window presenting an Excel application form that may be downloaded will appear.
• From the COSMOS (Cluster of Systems of Metadata for Official Statistics) website, the applicant should download the proper application form, which is NBFC.

• Completing the Form

• The applicant must correctly fill in the name of the Regional Office in the Excel form’s field designated as “C-8” of the “Annex-I Identification Particulars.”

• Giving a Company a CARN Number

• When the applicant has applied, a Company Application Reference Number (CARN) will be assigned for the online Certificate of Recognition (CoR).

• Application Submission to Regional Office

• The physical application and all other supporting papers should be submitted to the regional office of the Reserve Bank of India (RBI) as soon as the applicant receives the CARN number.

• RBI Review of the Application

• The RBI will carefully review the application form and any supporting documentation before being sent to the head office. 

• NBFC License Issue

• The Reserve Bank of India (RBI) will award an NBFC License if the application is accurate, the supporting documents are complete, and the records are clear.
• Within 90 days, the head office will award the NBFC License.
• By inputting the acknowledgement number, the applicant can check the application status.  

Winding up Note

NBFCs are businesses that somewhat resemble traditional banks. The fact that NBFCs cannot perform all tasks like other conventional banks due to limitations and differences makes them unique. The Documents Required for NBFC Registration in the Gurugram process is complex in and of itself because RBI approval is required. The registration process for NBFCs takes time. Therefore, to register an NBFC in Gurugram, you need a knowledgeable consultant with expertise working with RBI and NBFC Registration.