Direct Tax Services
Select Your Location
The Non-Banking Financial Companies (NBFCs) are considered almost similar to the conventional banks except a few differences which make them their counterparts. As per latest developments in the financial markets, the NBFCs are entering into the insurance sector also. The Reserve Bank of India has laid down the guidelines for NBFC Registration in India in the Insurance sector. In this article we will look at NBFCs in Insurance Business.
Table of Contents
Any Non-Banking Financial Company (NBFC) which has obtained NBFC registration with RBI for carrying out its operations and having a net owned fund (NOF) of Rs. 500 lakhs as per the last audited balance sheet shall be permitted to undertake insurance business as an agent of insurance companies on a fee basis, without any risk participation.
Prior to this, the concerned NBFCs shall also take approval from Insurance Regulatory and Development Authority (IRDA).
Under the following conditions, the approval of RBI is not required and the NBFCs can straightaway take the entry into the insurance business:
The desired NBFC shall make an application to the Reserve Bank of India along with the necessary documents and particulars duly certified by their statutory auditors to the Regional Office of Department of Non-Banking Supervision under whose jurisdiction the registered office of the NBFCs is situated.
The NBFCs planning to step into the business of insurance sector is required to hold the maximum equity contribution of 50 % of the paid-up equity capital of the Insurance Company with whom it has entered into the joint venture. In some cases, the Reserve Bank can allow a higher equity contribution by a promoter NBFC.
The Indian Insurance Industry is blooming gradually and so is the demand and supply cycle for all type of insurance in the country. This has added to the growth meter of NBFCs heading into this sector. The growth of interest towards insurance among Indians, innovative product designs and easy to access distribution channels are further accelerating the scale of the insurance sector. Also, the government has liberalized various policies for private players like NBFCs. The recent decision by the Indian parliament has further cleared the path for raising FDI (foreign direct investment) in the insurance sector thereby generating more employment opportunities, improved customer services, and competitive premiums rates.
Read our article:Surrendering the NBFC license: Reasons and procedure
Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.
NBFC is incorporated under the Companies Act of 2013. The Ministry of Corporate Affairs (MCA) a...
Financial Institutions called Asset Reconstruction Companies ("ARCs") reconstruct and securitis...
Any person booked for an offence under the Criminal Procedure Code (CrPc) / the Code would be r...
The Reserve Bank of India regulates Non-Banking Financial Companies in India, and they are subj...
The Reserve Bank of India regulates Non-banking Financial Companies in accordance with the RBI...
Incorporation of a Limited Liability Company (LLC) is an attractive choice for small business o...
The Reserve Bank of India (the Bank) issued Non-Banking Financial Companies Acceptance of Publi...
A few years ago, investing in traditional investment categories like shares, bonds, real estate...
Compared to other organisations, the corporate governance of Non-Banking Financial Companies is...
India is emerging as a global powerhouse. India is a huge market and is witnessing rapid econom...
Are you human?: 5 + 7 =
Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality
Non-banking financial companies are necessarily regulated & supervised by RBI which is the apex institution for...
20 Feb, 2018
NBFC is incorporated under the Companies Act of 2013. The Ministry of Corporate Affairs (MCA) and the RBI both have...
08 Jun, 2023
Red Herring Top 100 Asia enlists outstanding entrepreneurs and promising companies. It selects the award winners from approximately 2000 privately financed companies each year in the Asia. Since 1996, Red Herring has kept tabs on these up-and-comers. Red Herring editors were among the first to recognize that companies such as Google, Facebook, Kakao, Alibaba, Twitter, Rakuten, Salesforce.com, Xiaomi and YouTube would change the way we live and work.
Researchers have found out that organization using new technologies in their accounting and tax have better productivity as compared to those using the traditional methods. Complying with the recent technological trends in the accounting industry, Enterslice was formed to focus on the emerging start up companies and bring innovation in their traditional Chartered Accountants & Legal profession services, disrupt traditional Chartered Accountants practice mechanism & Lawyers.
Stay updated with all the latest legal updates. Just enter your email address and subscribe for free!
Chat on Whatsapp
Hey I'm Suman. Let's Talk!