Incorporate a Company
Begin by registering a company under the Companies Act, 2013. The company can be either a Private Limited company or a Public Limited entity. Ensure that the company's objectives, as stated in the Memorandum of Association (MOA), include conducting financial activities.
Meet the Net Owned Fund (NOF) Requirement
The company must have a minimum Net Owned Fund of ₹10 crore. This fund should be deposited in a bank account under the company's name and will remain locked until the RBI grants the Certificate of Registration (CoR).
Ensure Compliance with FEMA for Foreign Investment
If the company plans to receive foreign investment, it must comply with the Foreign Exchange Management Act (FEMA) regulations. This includes adhering to the guidelines set forth by the RBI concerning foreign direct investment in NBFCs.
4. Prepare Necessary Documentation
Gather and prepare the following documents:
Certificate of Incorporation: A certified copy issued by the Registrar of Companies.
MOA and Articles of Association (AOA): Certified copies detailing the company's objectives and regulations.
Board Resolution: A resolution passed by the company's board approving the submission of the application and confirming that the company has not accepted any public deposits and will not do so without prior RBI approval.
Directors' Profiles: Detailed information about the directors, including educational and professional backgrounds.
Financial Statements: Audited balance sheets and profit loss statements for the past three years, if applicable.
Income Tax Returns: Filed returns of the company and its directors for the past three years.
Bank Account Details: Proof of the NOF deposited in the company's bank account.
Credit Reports: Personal credit reports of all directors and shareholders from recognized credit bureaus.
Submit the Online Application via COSMOS
Access the RBI's COSMOS portal to submit the application:
Registration: Visit the COSMOS website and create an account for your company.
Application Form: Log in and fill out the online application form (Form NBS-1) with accurate information about the company and its directors.
Document Upload: Upload the prepared documents as per the instructions provided.
Application Fee: Pay the applicable fee during the online submission process.
Submit Physical Copies to the RBI Regional Office
After completing the online application:
Print Application: Obtain a printout of the submitted application form and the acknowledgment received.
Compile Documents: Assemble all supporting documents, ensuring they are duly signed, notarized, and attested where necessary.
Submission: Send the physical copies of the application and documents to the concerned Regional Office of the RBI.
Respond to RBI's Queries
During the review process, the RBI may request additional information or clarifications. It is essential to respond promptly to such queries to avoid delays in the registration process.
Obtain the Certificate of Registration (CoR)
Upon satisfactory review, the RBI will issue the CoR, officially recognizing the company as an NBFC. The company is now authorized to commence NBFC operations in India.
Additional Considerations
Regulatory Compliance: Post-registration, ensure adherence to all RBI regulations applicable to NBFCs, including periodic filings and compliance with prudential norms.
Corporate Governance: Maintain a robust corporate governance framework to uphold transparency and accountability in operations.
By meticulously following these steps and ensuring compliance with regulatory requirements, applicants can successfully establish an NBFC in India.
