Non-banking financial companies or NBFCs, are financial institutions providing the banking services but do not hold a banking license. These institutions are not permitted to receive public deposits. Although, banking regulations still cover all of these institutions operations and also NBFCs offer most types of banking services, such as loans and credit facilities, private education funding, retirement planning, money market trading, underwriting of stocks and shares, TFCs (Term Finance Certificate) and other obligations. These institutions also provide wealth management, such as stock and share portfolios, and discount services.


According to the Companies Act 2013, an NBFC is a company that carries on similar activities for the bank and except for the following activities:

·     NBFC cannot accept demand deposits
· NBFC Registration Procedure cannot issue Deposit Insurance, and Credit Guarantee Corporation insure bank to deposit checks.

What are the Categories of NBFC?

NBFCs are primarily classifying as NBFC deposits and non-deposits. Deposit-taking and non-deposit taking NBFC are further classified based on their size as such as Asset Finance Company, Investment Company, Loan Company, Infrastructure Finance Company, Infrastructure Debt Fund, and Micro Finance Institution.

NBFC Registration Procedure

·   According to section 45IA of the RBI Act 1934, no company shall start with the business of a non-bank financial institution without obtaining an NBFC registration certificate and without having an Rs. 200 lakhs Net Owned Funds.
· The basic requirement for NBFC Registration Procedure is Rs. 200 Lakhs ' minimum net owned funds.
·  Net Owned Funds means the balance of owned funds minus the amount of investment in the shares of subsidiaries. The Companies in the same group and all other for NBFCs, outstanding loans, and advances, deposits with subsidiaries to complete NBFC Registration Procedure.
·  Own funds are the aggregate of paid-up equity capital, mandatory convertible preferred shares into equity, free reserves.

For more information related to NBFC Registration, kindly contact Enterslice.