Non-Banking Financial Corporation (NBFC) is emerging a major source of money lender to those who are not able to take loans from banks or other financial institutions due to their low credit worthiness. Non-Banking Financial Institutions (NBFCs) are defined as companies under the Indian Companies Act, 1956 to offer loans, advances and acquisition of shares, stock and purchase and sale of assets for the purpose of agriculture and industries. NBFCs are playing an impeccable role in our country in supporting huge numbers of needy farmers and industrialists when they mostly need capital for their business operations and day to day activities. All those companies which financial assets are more than 50% of its total assets, they should apply to Reserve Bank Of India (RBI) for registration as a Non Banking Financial Corporation (NBFC). The registration of NBFC is extremely important in order protect the interest of investors and depositors and the regulation of money and capital for future investment purposes.
NBFC Registration Requirements
All companies those are waiting to get a certificate of NBFC must have to apply to RBI with all necessary documents and if the RBI finds it suitable then they will work as Non-Banking Financial Corporation (NBFC). All NBFCs are working under the rules and regulations of Reserve Bank of India Act, 1934 and mainly it deals with the business of loans, advances, sale and purchase of stock, shares and debentures and securities issued by Governments or local authorities of that particular region. Reserve Bank Of India is the Governing body which controls and administers the whole business functions of NBFC across the country. The registration process is mandatory for those want to start their business as a Non Banking Financial Corporation and for that they should fill the registration requirements as per the law. One should apply with an application form with all essential documents supporting the company and the RBI will scrutinize and then finally offer the certificate of registration for NBFC.