30 July 2013
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:
loan disbursed by an NBFC-MFI to a borrower with a rural household annual income not exceeding Rs. 60,000 or urban and semi-urban household income not exceeding Rs. 1,20,000;
loan amount does not exceed Rs. 35,000 in the first cycle and Rs. 50,000 in subsequent cycles;
total indebtedness of the borrower does not exceed Rs. 50,000;
tenure of the loan not to be less than 24 months for loan amount in excess of Rs. 15,000 with prepayment without penalty;
loan to be extended without collateral;
aggregate amount of loans, given for income generation, is not less than 75 per cent of the total loans given by the MFIs;
loan is repayable on weekly, fortnightly or monthly instalments at the choice of the borrower
Requirements for registration with RBI ***************************************
A company incorporated under the Companies Act, 1956 and desirous of commencing business of non-banking financial institution as defined under Section 45 I (a) of the RBI Act, 1934 should comply with the following:
i. it should be a company registered under Section 3 of the companies Act, 1954
ii. It should have a minimum net owned fund of Rs 200 lakh. (The minimum net owned fund (NOF) required for specialized NBFCs like NBFC-MFIs, NBFC-Factors, CICs is indicated separately in the FAQs on specialized NBFCs)
procedure for application to the Reserve Bank for Registration **************************************************
The applicant company is required to apply online and submit a physical copy of the application along with the necessary documents to the Regional Office of the Reserve Bank of India. The application can be submitted online by accessing RBI’s secured website https://secweb.rbi.org.in/COSMOS/rbilogin.do. At this stage, the applicant company will not need to log on to the COSMOS application and hence user ids are not required. ). The company can click on “CLICK” for Company Registration on the login page of the COSMOS Application. A window showing the Excel application form available for download would be displayed. The company can then download suitable application form (i.e. NBFC or SC/RC) from the above website, key in the data and upload the application form. The company may note to indicate the correct name of the Regional Office in the field “C-8” of the “Annex-Identification Particulars” in the Excel application form. The company would then get a Company Application Reference Number for the CoR application filed on-line. Thereafter, the company has to submit the hard copy of the application form (indicating the online Company Application Reference Number , along with the supporting documents, to the concerned Regional Office. The company can then check the status of the application from the above mentioned secure address, by keying in the acknowledgement number.
A hard copy of the application form is available at www.rbi.org.in → Site Map → NBFC List → Forms and Returns. An indicative checklist of the documents required to be submitted along with the application can be accessed from www.rbi.org.in → Site Map → NBFC List → Forms and Returns → Documents required for registration as NBFCs.
03 August 2024
If a company has a net owned fund of ₹1.6 crore and has not received any public deposits, it may still need to consider certain regulatory requirements under the Reserve Bank of India (RBI) guidelines. Here’s a detailed breakdown:
### 1. **Net Owned Fund and RBI Certificate**
1. **Definition of Net Owned Fund (NOF):** - Net Owned Fund typically refers to the total amount of funds owned by the company, excluding any borrowings or liabilities. It includes equity capital, reserves, and surplus.
2. **Regulatory Requirement for RBI Certificate:** - **Non-Banking Financial Companies (NBFCs):** If the company is categorized as an NBFC (Non-Banking Financial Company) and is engaged in financial activities like lending, asset financing, or investment activities, it is required to obtain an RBI license regardless of whether it has received public deposits or not. - **Company Type:** If the company is classified as an NBFC, then it needs to adhere to RBI regulations, including obtaining an RBI Certificate of Registration (CoR), irrespective of whether it has received public deposits or not.
### 2. **Types of Companies and RBI Registration**
- **NBFC (Non-Banking Financial Company):** - **With Public Deposits:** Companies that accept public deposits must be registered with the RBI and comply with the regulations specific to NBFCs that accept public deposits. - **Without Public Deposits:** Even if an NBFC does not accept public deposits, it must still be registered with the RBI if it meets the criteria for an NBFC (such as lending, leasing, investment activities). The RBI registration ensures regulatory oversight and compliance with statutory norms.
- **Other Entities (Non-NBFC):** - **General Companies:** If the company is not engaged in financial activities and is not classified as an NBFC, it may not need an RBI certificate. However, it should ensure compliance with other applicable laws and regulations.
### **Conclusion**
Since the company in question has a net owned fund of ₹1.6 crore and has not received any public deposits, the requirement for an RBI certificate depends on whether it is classified as an NBFC.
- **If it is an NBFC:** It needs to obtain an RBI Certificate of Registration even if it does not accept public deposits. - **If it is not an NBFC:** It does not need an RBI certificate, but it should comply with other relevant regulations based on its business activities.
It is advisable for the company to consult with a legal or financial advisor to confirm its classification and ensure compliance with all relevant regulatory requirements.
CAclubindia
