NBFC (Non Banking Financial Corporations) Compliances
While understanding the fundamental idea of Non-Banking Financial Companies (NBFCs), we'd like to understand what exactly NBFCs are. As per law, A Non-Banking Financial Company (NBFC) could also be a corporation registered under the Companies Act, 1956 engaged within the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or government agency or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but doesn't include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of the immovable property. In layman language Non-Banking Financial Companies (NBFCs) are the financial institutions that provide banking services but don't accommodate the legal definition of a bank, i.e. it doesn't hold a bank license.
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Types of NBFCs on the concept of activities and liabilities
Based on Liabilities
- Deposit Accepting NBFCs
- Non-Deposit Accepting NBFCs
- Systematically Important (NBFC-ND-SI)
- Other Non-Deposit Holding Companies
Based on Activities
- Infrastructure finance company (IFC)
- Investment and Credit Company (ICC)
- Systemically Important Core investment company (CIC)
- NBFC- Non-Operative financial holding company (NOFHC)
- Mortgage Guarantee Companies
- NBFC- Microfinance Companies (MFIs)
- Infrastructure Debt Fund Non-Banking Financial Company (IDF-NBFC)
+ GST 18%
+ GST 18%
+ GST 18%
A. NBFC represents non-banking financial institutions that perform capacities like banks without banks in rustic regions. MFI represents miniaturized scale account establishments and therefore the work on an extra littler level than NBFC. MFI gives little credit to the oppressed segments of the general public.
A. Insurance companies aren't NBFCs for a fundamental reason. They take money from financial investors as a protection premium to put resources into explicit protections as characterized by their regulator accordingly, to the sort of protection item and pay returns or claims to their consumers.
A. Many NBFC's are fast adopting the Central KYC registration, it is one of the most crucial NBFC compliance. The purpose of CKYC is to collect records for the purchasers in financial services. CERSAI which stands for Central Registry of Securitization and Asset Reconstruction and Security Interest, CERSAI is the registration authority for the Central KYC.
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