e. If the Director is a member of a professional association or body, details of any disciplinary action pending or taken against him in the past or resulting in a conviction, or if at any time he has been denied access to a profession/profession f. If the director receives one of the disqualifications provided for in Article 164 of the Companies Act 2013. It takes so long for each administrator`s profile to be verified by RBI. As a professional, we recommend maintaining the minimum number of directors with a clean profile required by RBI standards. And also the three sectors of finance, banking and IT. Qualification required for the position of director according to the selection criteria The RBI had issued a directive for banks in which it fulfills the duty of care towards individuals prior to their appointment to the boards of directors of banks on the basis of the «Report of the Advisory Group of Directors of Banks/Financial Institutions». Specific «eligibility criteria» for directors are required. It is proposed to follow the same guidelines for NBFS as well. d. Banker`s report on proposed directors/shareholders. 1.
Legal due diligence: is the review of a director or company on a legal basis. Such an audit takes into account the contracts concluded by the manager or the company, the property, the loans contracted, the ongoing disputes, the legal structure and compliance with the employment regulations of the organization. g. If the Director was investigated at the instigation of a government department or agency. a statement by the proposed directors/shareholders that they are not affiliated with an unincorporated entity that accepts contributions; Financial structure: In addition to the budget, an adequate financial structure is needed. This will help to understand the NBFC`s spending requirements. h. If at any time the administrator consults a regulatory authority such as SEBI, IRDA, MCA b. Declaration by the proposed directors/shareholders that they are not affiliated with any company whose application for a Certificate of Registration (CoR) has been rejected by the service offered by the Reserve Bank Service offered: First of all, we need to describe the service to the customer. The selection of services is based on market requirements.
A private limited liability company qualifies for the NBFC, a private limited liability company requires at least two directors, but it is advisable to have at least three or four directors. Directors were to be grouped into three sectors: banking, finance, information and technology (IT). Since all these sectors are involved in the operation of NBFCs. These companies invest in infrastructure bonds or public-private partnership projects with a minimum of Rs 300 crore. The main business and rating requirements are also different for these NBFCs. c. a statement by the proposed directors/shareholders that no criminal proceedings will be instituted against them, including for offences under section 138 of the Negotiable Instruments Act; and 2. Financial due diligence: is the financial audit of the director and the company, for example: Information about the company`s liabilities and assets such as debt, cash flows and other financial aspects of the company in relation to its capital, management, etc. 9. Directors` credit report (must not contain defects). Information and Technology (IT) Sector: In the age of digitization, everything is done online, all data is stored digitally and also transactions, it is better if the IT expert is in the directors, he will handle problems comparatively better. The importance of due diligence is to determine suitability for the position of director based on qualifications, technical expertise, background, integrity, etc.
Although the Reserve Bank exercises due diligence on directors before issuing a certificate of registration for an NBFC, it is necessary for NBFCs to establish internal oversight 3. In order to ensure the technical competence of NBFC`s senior and middle management, a regular assessment of computer training needs should be developed to ensure that sufficient, competent and competent human resources are available. However, for NBFC Peer-to-Peer (P2P), NBFC Account Aggregator (AA) and NBFC without public funds and without customer interface, net equity is still INR. 2 cr. The following NBFCs do not need to be registered with the Reserve Bank of India as they are regulated by other regulatory bodies: It usually takes about 6 months for the license to be granted if all the criteria are met. The whole process can be rendered hassle-free if you get the support of the right people. Contact us to get the right support. In this blog, we will try to highlight the challenges of registering an NBFC. A company that operates primarily as finance can form an NBFC. Financial activity as a main activity is when a company has these documents signed by the respective stakeholders Banking sector: NBFC have some of its characteristics like banks, it is advisable to have a person who has good experience in banking work, it is difficult for a beginner to operate NBFC without experience, because the scope of the work is huge. If foreign investment is expected, the company must comply with FEMA. 15.
Proof of company address (utility bill and lease agreement) NBFC-MGC is usually registered with RBI as a mortgage security company. Its main activity is to provide mortgage security. This guarantee is granted for the repayment of an outstanding mortgage and accrued interest on it. Up to the amount secured for a creditor institution in the event of a triggering event. The minimum NOF requirement and financial asset criteria are different for this type of NBFC. i. Any other statements/information deemed relevant to the assessment of relevance and relevance Exclusions from the definition: The NBFC`s activity does not include companies whose principal activity is: When preparing the NBFC`s business plan, the following sections should be considered. For NBFC registration, the requirements set out below must be met in accordance with Section 45-IA of the RBI Act 1934. 8. Detailed Profile of Directors and Shareholders Sales and Marketing: Describe the sales and marketing strategy used by NBFC. The marketing model used by your NBFC to reach potential customers and investors should be mentioned in this section. A company that meets both criteria is registered by the RBI as an NBFC.
The Reserve Bank has defined «core business» to ensure that only entities that primarily engage in financial activities are registered, regulated and supervised by the Reserve Bank. This test is popularly known as the 50-50 test and is used to determine whether or not a company is in the financial sector. A business plan is the roadmap of any institution. It maintains short- or long-term goals and helps achieve them. It defines the vision, mission and financial objectives. These NBFS receive shares, shares and securities. Transactions must meet the following conditions: 2. NBS may designate a senior executive as Chief Information Officer (CIO) or IT Operations Officer responsible for ensuring the implementation of IT policy at the operational level, including IT strategy, value creation, risk management and IT resource management. It is a financial institution that carries out its main activity as asset financing, financing is provided in loan/advance mode or otherwise for any activity other than its own and the acquisition of securities.