NBFC-Factors

It is concerned with the acquisition of receivables from an assignor in order to extend loans at a discount against the security of the receivables.

NBFC-Peer to Peer Lending (P2P)

Through the peer-to-peer lending marketplace, borrowers can obtain loans from individuals who are willing to lend their money to the borrower at an agreed-upon interest rate. For a P2P Lending License, it may take approximately 180 working days for RBI in-Principle Approval, followed by the Mandatory CISA Audit..

NBFC-Account Aggregators

It enables data sharing across multiple financial sector organizations that act as consent brokers, i.e., the intermediary data transfer among financial organizations with the user's consent. It entails aggregating data from various accounts such as bank accounts, investment accounts, consumer accounts, and other related financial accounts onto a single platform.

NBFC-Systemically Important Core Investment Company

It primarily invests in the equity, preference shares, debt, and loans of group companies.

NBFC-Infrastructure Debt Fund(IDF)

Its primary goal is to facilitate the flow of long-term debt into infrastructure projects.

NBFC- Investment and Credit Company (ICC)

An Investment and Credit Company is a company that does its primary business-asset finance by lending money. It enables the licensee to engage in various types of wholesale, retail loans, and investment business, including loan, asset finance, and investment company licenses, for a period of 120 days.

NBFC Infrastructure Finance Company (IFC)

An NBFC deploys at least 75% of its total assets in infrastructure loans and has a minimum net owned funds (NOF) of 300 crore rupees and a CRAR of 15%.

Non-Operative Financial Holding Company (NOFHC)

It is a type of financial institution that allows a promoter group to establish a new bank. It is a wholly owned NOFHC that holds banks and other financial services companies regulated by the Reserve Bank or other financial sector regulators to the extent permitted by regulatory prescription.

NBFC-Microfinance Institutions (MFIs)

It makes loans to small businesses that are underserved or do not qualify for loans. It was established to provide credit to economically disadvantaged groups.

Housing Finance Company

These are utilized to provide loans to people who want to build their dream home, with their main business being financing the purchase or construction of houses.

NBFC Mortgage Guarantee Company(MGC)

It refers to financial institutions where the mortgage guarantees business accounts for at least 90% of the business turnover or where the mortgage guarantee business accounts for at least 90% of the gross income and the net owned funds are 100 crore rupees.

Deposit-taking NBFCs

These are the ones that allow for public deposits.

Non-Deposit Taking NBFCs:

These are the ones that are not able to receive public deposits. On-deposit-taking NBFCs are further subdivided into systemically important NBFCs and others. In NBFC-ND-SI, all NBFCs-ND with assets of Rs. 500 crores or more as per the most recent audited balance sheet are exempt from adhering to the Prudential Norms, 2015.

Step-1: Organizing the Documents

It is critical for the applicant to gather all of the necessary documents in order to begin the NBFC Registration process.

Step-2: Making an Application to the RBI

The applicant must file the application with the authority after assembling the necessary documents. The following requirements must be met

• Capital Requirement for Fixed Deposit

  The capital required for a fixed deposit is Rs. 2 crores, which should be increased to Rs. 2.2 crore before filing an application with the RBI.

• Capital Requirement for the Incorporation of a Pvt. Ltd. Company

  The minimum capital required for the incorporation of a Pvt. Ltd. company is Rs. 10 lakhs. Following incorporation, promoters must raise the capital to Rs. 2.2 crore. If this is not done prior to obtaining an NBFC Registration license, the company will be unable to begin lending operations. The company will maintain a Rs. 2 crore FD in the bank.

• Number of Members

  There must be at least two shareholders or directors, one of whom must have experience in the financial sector and knowledge of finance.

Step-3: Submission of Application

The next step is for the applicant to submit the application along with the necessary documents for verification by the authority

Step-4: Verification Documents

The authority will verify the documents and application to ensure the accuracy of the applicant's submissions

Step-5: Registration Certificate

The registration certificate will be issued after the authority has successfully verified the application and documents.

Low cost and time:

The registration process for an NBFC is simpler than that of a small bank. Opening an account with a bank requires a significant amount of capital, time, and cost, whereas an NBFC does not.

Economic Growth:

NBFCs serve an underserved market by providing affordable and secure credit facilities for personal and business-related credit needs. As a result, NBFCs have aided the country's economic growth by granting financial independence to MSMEs, self-employed professionals, and individuals.

Allowed FDI:

Up to 100% Foreign Direct Investment is permitted under NBFC, which is another fantastic benefit of NBFC registration. Non-banking financial companies are the largest proponents of start-up finance in the country, and the financing process is faster and simpler than with banks.

Give Loans to People with Low Credit Scores:

Banks check credit scores first, and if the credit score is low, the loan application is rejected. NBFCs, on the other hand, make loans to people with poor credit.

Partnership:

The combination of partnership and database aids in increasing financial inclusion penetration. To successfully reach a large number of customers while minimizing risks, NBFCs have formed partnerships, including with the government, to use their database to identify customer worthiness, and thus lending has been productive.

Loan Recovery is Simple:

Because NBFCs are very systematic and offer significantly less loan amount, borrowers return the amount easily, making it convenient for lenders. It contributes to customers receiving lower-interest loans. It is also simpler to obtain a loan from an NBFC because banks have stringent regulations and time-consuming paperwork.

Provide a Variety of Options:

NBFCS has made extensive use of technological advancements such as mobile phones and the internet, which has aided in making information easily accessible at any time and from any location. As a result, it reaches a larger audience more quickly and indirectly gives rise to larger NBFCs. It has decreased demand for and reliance on bank branches.