All you need to know about NBFC DSA Registration

Ashish M. Shaji

16 Sep, 2021

NBFC DSA denotes Non-Banking Financial Companies Direct Selling Agent. NBFC DSA Registration refers to the registration of person working as a referral agent for NBFCs and banks. In rural areas, they are called Business Correspondents. The Direct Selling Agent helps in finding potential customers for banks or NBFCs that they represent. The leads generated is forwarded to the concerned bank or NBFCs.  In this article, we shall have a complete understanding of NBFC DSA Registration.

Eligibility criteria to obtain NBFC DSA Registration

The following eligibility criteria should be followed to obtain NBFC DSA Registration in India:

• The person should be an Indian Citizen;
• He should be above 18 years of age;
• Such person should be eager to work in public dealing;
• He should have knowledge regarding financial products;
• He should have good communication and convincing skills.

What are the benefits of becoming NBFC Direct Selling Agent?

The following are the benefits of becoming NBFC DSA:

• It ensures scope for additional income, but the amount may vary from lead to lead;
• It allows commencing new business with minimum risk and cost;
• It provides flexible working hours;
• There is no demand for higher qualification;
• Respective banks/NBFCs provides skill training.

Benefits of NBFC DSA to customers

It offers various benefits to customers. Some of them are discussed below:

• The direct selling agents provides resolutions in a timely manner to the issues and queries of customers;
• They allow customers to choose the appropriate loan as per their budget;
• Direct Selling Agents are also known to provide excellent after-sales assistance to customers.

Benefits of DSA to financial institutions

DSAs are beneficial to financial institutions in the following ways:

• They ensure ease in local approach;
• They can identify and shortlist potential customers;
• They help to improve awareness regarding the financial products provided by institutions to the common man;
• They address loan seekers efficiently;
• They perform preliminary verification and register the needs of clients.

Duties of NBFC DSA

Their duties are as follows:

• They collect the filled loan application from the clients along with the documents required;
• They also perform a preliminary check for both application and documents collected;
• They ensure that the documents collected are genuine and authentic;
• They upload or submit the application as well as documents;
• Provide their DSA Code that allows tracing the application.

Documents required for NBFC DSA Registration

The following documents are required for obtaining NBFC DSA Registration:

• Aadhaar Card of the applicant;
• PAN card of the applicant;
• Driving License;
• Details of bank account like IFSC and account number.

Procedure for NBFC DSA Registration in India

Usually, financial institutions such as Banks and Non-Banking Financial Companies uses its own method to register as Direct Selling Agents in India, but we have laid down the common procedure for such registration in India.

• Firstly you will be required to visit the respective bank, NBFCs or other financial platform to submit the application filled by you;
• Once the application is submitted, you can proceed for payment as prescribed;
• On the submission of the payment, the concerned bank or the NBFC or the lending institution would contact you further;
• Provide the documents requested by the respective institution;
• The institution shall then examine and verify the documents submitted against the requisites set by the institution;
• After that, due diligence will be conducted. A team of professionals from such institution will perform the process of due diligence and will determine the CIBIL score^[1] and also the credit history of the applicant;
• In case where the institution approves the form and documents submitted, then a legally attested agreement of NBFC DSA Registration shall be dispatched to the applicant;
• The applicants should fill out the details requested in the manner prescribed by the agreement;
• After agreeing to the terms and conditions, the applicant should approve the agreement by signing it;
• Submit the signed agreement to respective institutions;
• On obtaining the agreement, the institution shall give the DSA code which would be used as reference number to monitor the status of the loan application;
• Once DSA code is secured, the agent can perform the task of uploading loan documents.

Conclusion

A direct selling agent plays a pivotal role of representing lending institutions for potential clients or credit seekers. Their fundamental objective is to promote and sell financial product of the lending institution. For every lead that they generate allows them to gain some income (some % of the actual loan amount). Additionally, it is worth mentioning that the services extended by the Direct Selling Agents are taxable under the Reverse Charge Mechanism.

Read our article:Significance of NBFC Registration in the Indian Financial Market