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NBFC Company need to be registered under Company Act 1956. Initial documents includes the promoter address proof and id proof.
NBFC company normally known as Non Banking Finance Company.
Yes, After January 9, 1997 NBCFs are not allowed to commence the business of financial activities without obtaining a Certificate of Registration from the Reserve Bank. The auditors of all NBFCs are compulsory to report directly to the Reserve Bank the non-compliance by any company of the above statutory provisions.
NBFC is Non-banking financial company, that is registered under the Companies Act, 1956 of India and is engaged in the business of loans and advances, acquisition of debentures/shares /stock/bonds/securities issued by government or local authority or other securities of like marketable nature, leasing, hire-purchase, insurance business, chit business, but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase/sale/ construction of immovable property.
2 Crore for Indian Resident and 5 crore for Non Resident or Foreign Nation.
NBFCs are doing functions akin to that of banks, however there are a few differences:
As per Section 45-IA of the RBI Act, 1934, it is mandatory that every NBFC should be registered with RBI to commence or carry on any business of non-banking financial institution as defined in clause (a) of Section 45 I of the RBI Act, 1934.
However, to obviate dual regulation, certain category of NBFCs which are regulated by other regulators are exempted from the requirement of registration with RBI viz. venture capital fund/merchant banking companies/stock broking companies registered with Sebi, insurance company holding a valid certificate of registration issued by IRDA, Nidhi companies as notified under Section 620A of the Companies Act, 1956, chit companies as defined in clause (b) of Section 2 of the Chit Funds Act, 1982 or housing finance companies regulated by National Housing Bank.
The NBFCs that are registered with RBI are:
With effect from December 6, 2006 the above NBFCs registered with RBI have been reclassified as
AFC would be defined as any company which is a financial institution carrying on as its principal business the financing of physical assets supporting productive / economic activity, such as automobiles, tractors, lathe machines, generator sets, earth moving and material handling equipments, moving on own power and general purpose industrial machines.
Principal business for this purpose is defined as aggregate of financing real/physical assets supporting economic activity and income arising therefrom is not less than 60% of its total assets and total income respectively.
The above type of companies may be further classified into those accepting deposits or those not accepting deposits.
Besides the above class of NBFCs the Residuary Non-Banking Companies are also registered as NBFC with the Bank.
A company incorporated under the Companies Act, 1956 and desirous of commencing business of non-banking financial institution as defined under Section 45 I(a) of the RBI Act, 1934 should have a minimum net owned fund of Rs 25 lakh (raised to Rs 2 crore from April 21, 1999).
The company is required to submit its application for registration in the prescribed format alongwith necessary documents for bank's consideration. The bank issues certificate of registration after satisfying itself that the conditions as enumerated in Section 45-IA of the RBI Act, 1934 are satisfied.
The list of registered NBFCs is available on the web site of Reserve Bank of India and can be viewed at www.rbi.org.in. The instructions issued to NBFCs from time to time are also hosted at the above site. Besides, instructions are also issued through Official Gazette notifications. Press releases are also issued to draw attention of the public/NBFCs.