NBFC is Non-banking financial company, which is registered under the Companies Act, 1956 of India and is engaged in the business of loans and advances, acquisition of shares/ debentures /stock/bonds/securities issued by government or local authority or other securities of like marketable nature, leasing, hire-purchase, chit business, insurance business but does not include any institution whose principal business is that of industrial activity, agriculture activity purchase/sale/ construction of immovable property.
NBFC needs necessary registration with the Reserve Bank to carry on the financial business as the case may be. NBFC is incorporated before January 9, 1997 to apply for such a Certificate of NBFC Registration within six months ending on July 8, 1997 to enable them to carry on their business of financial nature. After January 9, 1997 NBCFs are not allowed to commence the business of financial activities without obtaining a Certificate of Registration from the Reserve Bank. The auditors of all NBFCs are necessary to report directly to the Reserve Bank the non-compliance by any company of the above statutory provisions.
NBFC Registration in India
The reserve bank of India regulates the working and operations of NBFC within the framework of the Reserve Bank of India Act, 1934 and the directions issued by it under the act. NBFC is Non- banking- financial company according to RBI act, which is registered under the Companies Act, 1956 of India and is engaged in the business of loans and advances, acquisition of shares/ debentures/ bonds/ stock/ securities issued by the government or local authority.
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