RBI Allows Piramal Enterprises To Start NBFC Business

The Reserve Bank of India has allowed the Piramal Enterprises to start non-banking finance company (NBFC) operations. The bank has provided it a licence for initiating an NBFC but not accepting public deposits.

“The RBI has granted a certificate of registration to the company to commence the business of non-banking financial institution without accepting public deposits. The said licence was received by the company on July 26,” Piramal said in an exchange filing.

The approval from the RBI comes after the company received clearance of the shareholders to demerge its pharmaceuticals business and simplify its corporate structure.

Earlier, the company had acquired Dewan Housing Finance (DHFL) for INR 34,250 crore. The acquisition will diversify Piramal Enterprises’ loan book towards retail financing by scaling up the retail loan book by up to five times, the company had said earlier.

What Is NBFC

Non-Banking Financial Company (NBFC) is financial institution that does not have a banking licence but can offer financial products and services to customers. NBFC Registration is primarily concerned with loans and advances, acquisition of shares, hire-purchase, finance leasing, chit fund among others.  An NBFC must be different from a bank in ways like an NBFC cannot accept savings and current account deposits, cannot issue cheques drawn on itself, and its depositors do not get a deposit insurance and credit guarantee coverage.

Registration Process for NBFC

In order to register for NBFC, one needs to register a company under the Companies Act 2013 while having minimum net owned funds INR 2 crore or more. The company should have at least one director from the same background. For registering, CIBIL score must be good

Once the requirements are complete, visit RBI’s official website and fill in an application form to submit the required documents. One application form is submitted, a CARN number will be generated. After an application is checked and verified, the License shall be given to the company.

Documents Required For NBFC Registration

Documents required for NBFC registration include Certificate of Company Incorporation, detailed information about management along with a brochure of the company, a copy of PAN or Corporate Identity Number (CIN) of the company, documents related to the office location/address, certified copy of the Articles of Association (AOA) and Memorandum of Association (MOA), list of Directors’ profile must be duly signed by each director must be attached, CIBIL or credit reports of the Directors of the Company are required among other document.

NBFC Registration Fees

Fees must be deposited for NBFC registration is classified under various types which are mentioned below:

While registering the company, a fee based on the company’s authorised capital is to be paid to the Ministry of Corporate Affairs (MCA), a company also need to pay fees based on the authorised capital and other few factors for the MOA (Memorandum of Association) and AOA (Articles of Association) of the company, simplified Performa for Incorporating Company electronically (SPICe+) filling might also require the company to pay certain fees, for (DIN) Director Identification Numbers, a predetermined fee is paid to the MCA and others.