Procedure for Registration of NBFC & Housing Finance Company - tradecareer.

      Procedure for Registration of NBFC & Housing Finance Company


NO NBFC can commence or carry on business of a financial institution without obtaining a Certificate of Registration(COR) from the RBI and having a Minimum Net Owned Funds of RS. 2 Crore.

1. Incorporation of Company

Firstly, incorporate a Company following the normal procedure as prescribed under co. act 2013 and rules made thereunder.


2. Pre-requisite of Registration with RBI

a) It should be a company registered under Companies Act,2013 or previous Companies Act,1956.

b) It should have minimum net owned funds of INR Rs. 2 crore.

c) It should have minimum 1 director from NBFC background or senior Bankers as full-time director in the company

d) Clean CIBIL records

e) Understanding of NBFC/Finance business

                                                                              


1. Filing of Application with RBI

An online application available on RBI's website (cosmos.rbi.gov.in) should be filled in along with all the necessary documents.

Note: A CARN number will be generated which shall be preserved for inquiring about the status of the application.


2. Submission of Hard Copy Documents

The hardcopy of the application along with attached documents should be submitted to the regional branch of RBI.


3. Grant of License

A license will be granted only after careful scrutiny of the application and documents.



                                            HOUSING FINANCE COMPANIES

Housing Finance Company (HFC) is a type of NBFC which is primarily engaged in the business of providing home loans and other related products. Unlike other NBFC which are governed under the regulatory framework of RBI, HFCs are regulated by the National Housing Bank (NHB).

=> Collateral securities are accepted against loans advanced by HFCs. 

=> The amount of loan advanced depends upon the value of the collateral offered. 

=> The value of the collateral ensures that the lender is secured and has covered itself.           from the risk of default. 

=> It is necessary to have correct and realistic valuation of properties or fixed assets at.            the time of advancement of loan. 

=> Loans given by HFC’s are usually for a long period of time. 

=> HFC is a company registered under the Companies Act, 2013 or any earlier enactment.       which primarily transacts or has as one of its principal objects, the transacting of the.         business of providing finance for housing, whether directly or indirectly. 

=> An HFC is also requires registration with National Housing Bank( NHB) for.                          commencing or carrying on the business of housing finance. 

=> The National Housing Bank was set up as wholly owned subsidiary of RBI under the.         National Housing Bank Act, 1987. HFCs are governed by the said Act and by Circulars,         Guidelines, Notifications and Directions issued by National Housing Bank.

                                                                          


Procedure for Registration of HFC

No HFC can commence or carry on business of a financial institution without obtaining a Certificate of Registration (COR) from the National Housing Bank and having a Minimum Net Owned Funds of Rs. 10 Crore.

1) Incorporation of Company

Firstly, incorporate a Company following the normal procedure

2) Filing Application with NHB

=> The applicant company is required to submit a physical copy of the application (in duplicate) along with the essential documents to the Head Office of the National Housing Bank.

=>Further, Company is also required to attach a Demand Draft for Rs. 10,000 favoring National Housing Bank payable at New Delhi.

3) Grant of License

NHB after satisfying itself on the fulfilment of following conditions may grant Certificate of Registration:

=> It shall be in a position to pay its present or future depositors in full as and when their claims accrue;

=> Affairs of the HFC are not being or are not likely to be conducted in a manner detrimental to the interest of its present or future depositors;

=> management shall not be prejudicial to the public interest or to the interests of its depositors;

=> It has adequate capital structure and earning prospects;

=> Grant of certificate of registration shall serve Public interest;

=> Grant of certificate of registration shall not be prejudicial to the operation and growth of the housing finance sector of the country.

Comments

Post a Comment

Popular posts from this blog

Benefits of incorporating NBFC - tradecareer.

Image
                              BENEFITS OF INCORPORATING NBFC: According to research and studies it is proved that NBFCs are outperforming banks. The continued better performance from NBFCs has given rise to an uptick of 15% customer satisfaction as compared to the banking customers. The same is agreed by the RBI according to the recent Financial Stability Report. Banks and NBFCs are financial intermediaries and the services offered by them are pretty much the same as banks.However, the benefits of incorporating an NBFC and carrying on its activities are listed below: 1.Competitive Interest Rates: Rate of interest is one of the main aspects of all types of loans. Non-Banking Financial Sectors have started to concentrate on this area in the recent decades and have brought down the interest rates to either equal to bank lending rates or at times even lower to bank rates.  With all the other benefits when rate o...
Read more

What are the types of NBFC - tradecareer.

Image
                    Types  of non banking financial company  1. Asset Finance Company (AFC) 2. Investment Company (IC) 3. Loan Company (LC) 4. Infrastructure Finance Company (IFC) 5. Systemically Important Core Investment Company 6. Infrastructure Debt Fund - Non- Banking Financial Company (IDF-NBFC) 7. Non-Banking Financial Company - Micro Finance Institution (NBFC-MFI) 8. Non-Banking Financial Company – Factors (NBFC-Factors) 9. Mortgage Guarantee Companies (MGC) 10. NBFC I. Asset Finance Company (AFC): An AFC is a company which is a financial institution carrying on as its principal businessas the financing of physical assets supporting productive/economic activity, such as automobiles, tractors, lathe machines, generator sets, earth moving and material handling equipment, moving on own power and general purpose industrial machines. Principal business for this purpose is defined as aggregate of financing real/physical assets...
Read more

The SEBI - securities & exchange board of india.,tradecareer.blogspot.com

Image
                     The securities and exchange board of India                                                                    INTRODUCTION   SEBI is a body corporate having perpetual succession and a common seal with power to  acquire, hold and dispose of property, both movable and immovable and to contract,  sue and be sued in its own name. Its Head Office is at Mumbai and is empowered to establish its offices at other places in  India. SEBI presently has offices also in Ahmedabad, Jaipur, Kolkata, Guwahati,  Bhubaneswar, New Delhi, Chennai and Bengaluru.                                                     ...
Read more