NBFC Checklist: Documents Required for NBFC Registration

Ashish M. Shaji

02 Dec, 2020

NBFCs Registration is in huge demand post demonetization in India. RBI (Reserve bank of India)^[1]  also understands the funding gap in the Indian Eco-system and therefore in 2017, RBI has introduced more liberal norms for new entrants In the financial market. In this article we have described about NBFC Checklist: Documents Required for NBFC Registration.

What are NBFCs?

Non-Banking Financial Company is a financial institution that offers financial products and services to its customers. It is concerned with the business of loans and advances, finance leasing etc. It may be noted that NBFCs are different from banks in many ways.

Documents Required for NBFC Registration

The documents required are as follows:

• Certificate of Registration (an exact copy can be obtained from respective ROC office )
• Certified copies of an extract of only the main object clause in the MOA and AOA relating to the financial business.
• Board Resolution stating that :

1. The Company is not carrying on any activity as of Non-Banking Financial Company and will not commence the same operation as similar to NBFCs before getting registration from RBI.
2. The UIB’s in the group where the director holds substantial interest or otherwise has not accepted any public deposit in the past and is not holding the same and will not accept the same in the future.
3. The company formulates fair practices code as per the RBI Guidelines.
4. The company has not accepted public funds in the past/does not hold any public funds as on the date and will not accept the same in the future without the approval of Reserve Bank of India.
5. The company does not have any customer interface as on the date and will not have any customer interface in the future without the approval of the Reserve Bank of India.

• A copy of Fixed Deposit receipts & bankers certificate of no lien indicating balances in support of NOF. Fixed deposit post-RBI approval can be used for only for NBFCs Registration.
• For companies already in existence, the Audited Balance Sheet and P&L account along with directors & auditor’s report or for the entire period the company is in existence, or for last three years whichever is submitted.
• As per Recent guidelines of RBI, Bankers report for applicant group/subsidiary, associate, holding the company and all related party directors having a substantial interest in other companies must be attached with the application.
• The copy of the certificate of the highest educational and CA/CS/ CWA professional qualification in respect of all directors.
• A copy of experience certificate, if any, in the Financial Services Sector (including Banking Sector) in respect of all directors.
• List of the profile of directors duly signed by director.
• CIBIL or credit reports of the Directors of the company.
• Information about bank account, balances, loans etc.

Documents required for NBFC Registration: From Directors

Directors are required to provide the following documents:

• Personal ID and Address proof;
• Highest qualification certificate;
• Net worth certificate;
• Details of directorship, if any, in other companies;
• CIBIL report;
• Certificate of experience.

Documents required for NBFC Registration: From Shareholders

• Personal ID and Address proof of subscriber;
• Net worth certificate;
• CIBIL report;
• Bankers report.

Conclusion

In order to avoid fraudulent practices, RBI has made compliances strict and tough. Proper documentation and compliances should be done by the NBFCs to avoid paying penalties. Proper documentation will also instil confidence among customers therefore ensure compliance of documents required for NBFC registration. For NBFC Registration, contact Enterslice.

Read our article: Prior Approval for NBFC’s Merger/Amalgamation from RBI