NBFC (NON BANKING FINANCING COMPANY)- MFI REGISTRATION IN INDIA
Non-Banking Financial Company - Micro Finance Institution (NBFC-MFI): NBFC-MFI is a non-deposit taking NBFC having not less than 85% of its assets in the nature of qualifying assets which satisfy the following criteria:
a. loan disbursed by an NBFC-MFI to a borrower with a rural household annual income not exceeding ₹ 1,00,000 or urban and semi-urban household income not exceeding ₹ 1,60,000;
b. loan amount does not exceed ₹ 50,000 in the first cycle and ₹ 1,00,000 in subsequent cycles;
c. total indebtedness of the borrower does not exceed ₹ 1,00,000;
d. tenure of the loan not to be less than 24 months for loan amount in excess of ₹ 15,000 with prepayment without penalty;
e. loan to be extended without collateral;
f. aggregate amount of loans, given for income generation, is not less than 50 per cent of the total loans given by the MFIs;
g. loan is repayable on weekly, fortnightly or monthly instalments at the choice of the borrower
DOCUMENTS REQUIREMENT FOR NBFC-MFI
An indicative list of basic documents/information to be furnished along with the application form:
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Sr. No. |
Requirements to be complied with and documents to be submitted to RBI by Companies for obtaining certificate and Registration from RBI as NBFC |
Page no. in file |
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1 |
Certified copies of Certificate of Incorporation and Certificate of Commencement of Business in case of public limited companies. |
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2 |
Certified copies of extract of only the main object clause in the MOA relating to the financial business. |
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3 |
Board resolution stating that:
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4 |
Copy of Fixed Deposit receipt & bankers certificate of no lien indicating balances in support of NOF |
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5 |
For companies already in existence, the Audited balance sheet and Profit & Loss account along with directors & auditors report or for the entire period the company is in existence, or for last three years, whichever is less, should be submitted |
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6 |
Copy of the certificate of highest educational and professional qualification in respect of all the directors |
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7 |
Copy of experience certificate, if any, in the Financial Services Sector (including Banking Sector) in respect of all the directors |
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8 |
Banker’s report in respect of applicant company, its group/subsidiary/associate/holding company/related parties, directors of the applicant company having substantial interest in other companies The Banker’s report should be about the dealings of these entities with these bankers as a depositing entity or a borrowing entity. Note: Please provide bankers report from all the bankers of each of these entities and provide the report for all the entities. The details of deposits and loans balances as on the date of application and the conduct of the account should be specified. |
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In addition to the Documents required for registration as Type II - NBFC-ND, following list of documents / information to be submitted by the NBFC-MFI applicant:
- Board resolution stating that:
- the company will be a member of all the Credit Information Companies and will be a member of at least one Self Regulatory Organisation
- the company will adhere to the regulations regarding pricing of credit, Fair Practices in lending and non-coercive method of recovery as per RBI Guidelines
- the company has fixed internal exposure limits to avoid any undesirable concentration in specific geographical locations
- the company is not licensed under Section 25 of the Companies Act, 1956 / Section 8 of the Companies Act, 2013.
- Roadmap for achieving 85% qualifying assets.
PROCESSING TIME
120-180 WORKING DAYS
STEPS FOR REGISTRATION
Step 1: Register the company under the Companies Act 2013 or under Companies Act 1956.
Step 2: Minimum Net Owned Funds of the Company should be Rs. 2 crore or more.
Step 3: There should be atleast 1 director in the company from the same background.
Step 4: Good CIBIL score is required to present in order to register as NBFC.
Step 5: Next, visit RBI’s official website and fill in the application form.
Step 6: Submit all the required documents along with the application form.
Step 7: Once you have submitted the application form, a CARN number will be generated.
Step 8: Send the hard copy of the application to the regional branch of RBI.
Step 9: After the application is checked and verified, the License will be given to the company.
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