NBFC stands for Non-Banking Financial Company. It is a financial institution that provides banking services without having a banking license. NBFCs typically provide a wide range of financial services, such as lending, investments, financial leasing, hire purchase, insurance, and other related activities.

1. Complete Guide on NBFC
(Non-Banking Financial
Company) Registration
PREPARED BY, ASC GROUP

2. INDEX
What is NBFC?
How is NBFC different from Bank
Importance of NBFC's
Types of NBFC's
How NBFC is helpful in current scenario?
Process of NBFC Registration
Compliances under NBFC Registration
How ASC Group helps in obtaining NBFC Registration?

3. What is NBFC?
NBFC stands for Non-Banking Financial Company. It is a financial institution that provides banking services
without having a banking license. NBFCs typically provide a wide range of financial services, such as lending,
investments, financial leasing, hire purchase, insurance, and other related activities.
NBFCs play a crucial role in the Indian financial system, providing access to credit and other financial
services to sectors of the economy that are underserved by traditional banks. NBFCs are regulated by the
Reserve Bank of India (RBI) under the Reserve Bank of India Act, 1934.
In India, NBFCs are classified into several categories based on their activities, such as asset finance
companies, loan companies, investment companies, and infrastructure finance companies, among others.

4. How is NBFC different from Bank?
NBFCs and banks are different in several ways, such as:
1) Regulatory framework: Banks are regulated by the Reserve Bank of India (RBI) under the Banking Regulation Act, while
NBFCs are regulated by the RBI under the Reserve Bank of India Act.
2) Legal status: Banks are licensed financial institutions that can accept deposits from the public, while NBFCs are not
authorized to accept demand deposits.
3) Ownership: Banks are typically owned by shareholders, while NBFCs can be owned by individuals, partnership firms, or
companies.
4) Deposit insurance: Bank deposits are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC), while
NBFC deposits are not insured.
5) Lending restrictions: Banks can lend money for any purpose, while NBFCs have certain restrictions on lending, such as a
minimum of 50% of their assets must be in the form of loans and advances.
6) Credit rating: Banks typically have higher credit ratings than NBFCs because they are subject to stricter regulatory norms
and have a more extensive track record.
7) Access to central bank funding: Banks have access to funding from the central bank, while NBFCs do not.

5. Importance of NBFC’s Registration
Here are the key points summarizing the importance of NBFCs:
• Provide access to credit and financial services to
underserved sectors of the economy
• Offer a diverse range of financial products and services
• Foster innovation in the financial sector
• Create employment opportunities
• Contribute to the economy by providing financing to various
sectors

6. Types of NBFC's
NBFCs in India are classified into various types based on their principal business
activities. Here are some of the common types of NBFCs in India:
• Asset finance companies: These NBFCs specialize in providing loans and leasing
services for the purchase of physical assets such as machinery, vehicles, and
equipment.
• Investment companies: These NBFCs primarily invest in securities such as
shares, stocks, and bonds.
• Loan companies: These NBFCs specialize in providing loans, including personal
loans, business loans, and other types of credit facilities.
• Infrastructure finance companies: These NBFCs provide long-term loans and
other financial services for infrastructure projects such as power,
telecommunications, and transportation.
• Microfinance institutions: These NBFCs provide small loans and other financial
services to low-income households and small businesses.

7. Types of NBFC's
• Factors: These NBFCs specialize in factoring services, which involve
purchasing accounts receivable at a discount.
• Housing finance companies: These NBFCs specialize in providing loans for
the purchase or construction of residential property.
• Gold loan companies: These NBFCs provide loans against the security of gold
ornaments and coins.
• Non-operating financial holding companies: These NBFCs do not engage in
any business operations but hold investments in subsidiaries and other
companies.

8. How NBFC is helpful in
current scenario?
Here are the key points summarizing the importance of NBFCs in the
current scenario:
• Provide alternative financing options to individuals and businesses
• Invested in digital infrastructure to offer online and contactless
services
• Support from the Indian government through various measures,
including liquidity support and regulatory relief
• Play a crucial role in providing credit to sectors such as MSMEs,
which have been impacted by the COVID-19 pandemic

9. Process of NBFC Registration
Here are the key steps involved in obtaining NBFC registration in India
in a summarized form:
1. Incorporate a company under the Companies Act, 2013 with a minimum
net owned fund of Rs. 2 crores.
2. Apply to the Reserve Bank of India (RBI) for registration as an NBFC
through the RBI's online portal.
3. Submit necessary documents, such as certificate of incorporation,
memorandum and articles of association, and details of proposed
directors.
4. Fulfill other regulatory requirements, such as maintaining capital adequacy
ratios and complying with anti-money laundering laws.
5. Obtain NBFC registration from the RBI.

10. Compliances under NBFC Registration
Once an NBFC obtains registration from the Reserve Bank of India (RBI), it must comply with various regulatory requirements.
Here are some of the key compliances that an NBFC must fulfill:
• Capital Adequacy: An NBFC must maintain a minimum capital adequacy ratio (CAR) of 15% of its aggregate risk-
weighted assets. The CAR can be maintained through equity share capital, preference shares, and other instruments.
• Reporting requirements: An NBFC must submit regular reports to the RBI, including audited annual financial statements,
quarterly prudential and statistical returns, and other reports as required.
• Anti-money laundering (AML) compliance: An NBFC must comply with AML laws and regulations, including conducting
customer due diligence, maintaining records, and reporting suspicious transactions.
• KYC compliance: NBFCs are required to comply with the Know Your Customer (KYC) guidelines and obtain necessary
information from their customers.
• Fair Practices Code: NBFCs must adopt and follow the Fair Practices Code, which outlines ethical and fair practices in
their operations.
• Other regulatory compliance: NBFCs must comply with various other regulatory requirements, such as complying with
the provisions of the Companies Act, 2013, and other relevant laws.

11. How ASC Group helps in obtaining NBFC Registration?
Here are some key ways in which ASC Group can help with NBFC registration in a summarized form:
• Compliance expertise: Business consultants can provide guidance on the various regulatory requirements for NBFC
registration.
• Documentation: They can assist with the preparation and submission of necessary documents required for NBFC
registration.
• Business Plan: Business consultants can help in developing a robust business plan that meets the RBI's requirements.
• Capital adequacy: They can advise on capital adequacy requirements and help companies maintain the required capital.
• Process efficiency: Business consultants can help streamline the NBFC registration process and reduce the time required
for approval.
Overall, ASC Group can provide valuable guidance and support to companies seeking NBFC registration, helping them
navigate the complex regulatory landscape and fulfill the necessary requirements efficiently.

12. About ASC Group
ASC Group started in 1995 as a CA firm with a view to offer all accounting and financial services for individuals and
corporates under one roof.
It has a team of more than 300+ people including 120 experts comprising of Chartered Accountants, Company Secretaries,
Advocates, Insolvency Professionals and Management Professionals. Being Registered Office in Delhi, it has several
branches in India like Noida, Gurugram, Mumbai, Bangalore, Chennai and overseas countries with a branch office set up in
Singapore and Canada.
ASC Group is offering services through many interlinked entities: Alok Sinhal & Co. (the original Chartered Accountant
firm), Themis and Dike (the legal arm of the ASC group), ASC Consulting Private Limited (catering to multinationals doing
business in India), ASC Consulting Pvt. Ltd. (serving to corporates located in Singapore), ASC Ventures Corp (serving to
corporates located in Canada) etc.
The Firm’s rich heritage is apparent in the values for which we stand – integrity, reliability & proficiency. It is our
considered policy to provide professional services in a conservative manner with due attention to the security and
propriety of the transactions involved.
Singapore
Canada
Delhi
Noida
Gurugram
Mumbai
Bangalore
Chennai
Pune

13. Mobile: 9999043311
Email: info@ascgroup.in
Website: https://www.ascgroup.in/
Location: Delhi | Noida| Gurugram | Mumbai | Chennai | Pune | Bangalore | Canada | Singapore