12 February 2021
What is the procedure to resign as the Director from an NBFC? I know we need to update ROC. Can the application, if any to RBI be initiated by self or does it need to be initiated by the NBFC?
10 July 2024
Resigning as a Director from a Non-Banking Financial Company (NBFC) involves specific procedures that need to be followed in compliance with regulatory requirements. Here’s a step-by-step outline of what needs to be done:
### Resignation Procedure:
1. **Board Resolution**: The first step is to convene a board meeting of the NBFC. In this meeting, a resolution should be passed to accept the resignation of the Director. The resolution should clearly state the effective date of resignation.
2. **Intimation to RBI**: As per the RBI guidelines, any change in the board of directors of an NBFC must be intimated to the Reserve Bank of India (RBI) within 30 days from the date of the board meeting where the resignation was accepted. This intimation is typically done through the Centralized Information System (CIS) portal of the RBI.
3. **Form DIR-12**: After passing the board resolution, the NBFC needs to file Form DIR-12 with the Registrar of Companies (ROC) within 30 days of the board meeting. Form DIR-12 is the form for filing changes in the particulars of directors with the ROC. Along with Form DIR-12, the following documents are typically required: - Certified copy of the board resolution accepting the resignation. - Resignation letter submitted by the Director. - Any other relevant documents as per ROC requirements.
4. **ROC Compliance**: Once Form DIR-12 is filed and processed by the ROC, the Director’s details will be updated in the MCA (Ministry of Corporate Affairs) records.
### RBI Intimation:
- The NBFC is responsible for initiating the intimation process to the RBI regarding the change in the board of directors. This can be done by the company secretary or any authorized signatory of the NBFC through the RBI's CIS portal. - The RBI typically requires specific details such as the name of the Director resigning, the effective date of resignation, and other relevant particulars. This information is crucial for maintaining regulatory compliance and transparency.
### Points to Note:
- **Self-Initiation**: The application to the RBI (through the CIS portal) should be initiated by the NBFC itself or its authorized representative. Directors resigning from an NBFC do not typically initiate this process directly with the RBI.
- **Legal Advice**: It’s advisable to seek legal counsel or consult with a professional familiar with NBFC regulations to ensure all procedures are correctly followed and all necessary documents are submitted in compliance with RBI and ROC requirements.
By following these steps and ensuring timely compliance with regulatory bodies, the resignation process of a Director from an NBFC can be effectively managed while adhering to legal norms and maintaining transparency.
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