Eligibility Norms to Start a NBFC Business
                     Eligibility Norms to 
Start a Business?
‘NBFCs’
Non-Banking Financial Companies (NBFC) do not fall in 
the legal definition of Banks but they proffer banking 
facilities and financial services. It is a well-known fact 
that Banks are not able to cater to the financial needs of 
all Indians, however hard they try; therefore, more and 
more companies are applying for NBFC Registration. 
The functioning of NBFCs is regulated and monitored by 
the RBI in compliance with the provisions mentioned in 
Chapter III B of the RBI Act of 1934.
The segments which are largely served by the NBFCs 
are instruments of the capital and money markets such 
as stocks, bonds, along with hire-purchasing, deposits, 
leasing, insurance business, investment funds, and chit 
business and many more similar activities.
Services
Services NBFCs Can Offer
The business activities of NBFCs include loans & 
advances, acquisition of shares or stocks or bonds or 
debentures or securities that are issued by govt or local 
authority or other marketable securities of similar 
nature, like leasing, hire-purchase, insurance business, 
chit business, etc.
Services NBFCs Cannot Offer:
RBI clearly defines the domains which cannot be 
touched by the NBFCs, and thus agriculture activity, 
industrial activity, purchase or sale of any goods (other 
than securities) or providing any services, sale or 
purchase or construction of the immovable property, 
cannot be dealt with by NBFCs.
Eligibility Norms
 
 Company should be registered under the Companies 
Act, 2013 or Companies Act, 1956
 Company should have Minimum Net Owned Fund of 
INR 2 crore
(Net Owned Funds to be calculated on the basis of the 
last audited balance sheet of the Company)
Types of NBFCs, Based 
On 
The Nature of Activity
 Mortgage Guarantee Company
 Asset Finance Company
 Microfinance Company
 Infrastructure Finance Company
 Housing Finance Company
 Investment Company
 Loan Company
 Core Investment Company
Decode the Procedure
Of NBFC Registration
 First formality is forming a company with Minimum Net Owned 
Fund of INR 2 crore (Equity Share Capital & not Preference Share 
Capital).
 Then the company needs to open a Bank Account and keep the 
entire sum of INR 2 crores in a bank’s deposit account which 
should be free from all liens).
 The Applicant company is then required to file an online 
application on the RBI’s website.
 After the submission, the applicant will get a reference number 
that shall enable to facilitate inquiry in the future.
 Thereafter, the company needs to submit the hard copies of the 
required documents to the concerned Regional Office of RBI.
 The Regional Office will verify the accuracy of all submitted 
documents and on satisfaction, it will forward the application for 
NBFC registration to the central office.
 The central office of RBI grants the NBFC registration only after 
the applicant fulfils all prescribed requirements in section 45-IA, 
of its act of 1934.
“NBFCs have become the driving force of the 
Indian economy, their USP being versatility and 
flexibility which helps them to penetrate all 
corners of the country!”
-Shweta Gupta, Founder, and CEO, MUDS
For more information visit: 
https://www.muds.co.in/nbfc-registration/
Thank You!