Micro finance company registration

Description

Microfinance Company Registration Process

To set up an MFI as an NBFC you are mandatorily required to obtain the approval of the RBI. We have discussed the step by step procedure of setting up a microfinance company as an NBFC in India.

STEP 1 – Documentation

To obtain a license from the RBI, an application needs to be filed in the prescribed format, along with a number of documents, as listed below. A failure to produce any of these documents during the time of application can lead to the complete rejection of the application. To avoid such a situation, it is advised that all the documents required to be filed must be arranged before beginning the application process.

STEP 2 – Incorporate your company

An MFI-NBFC can either be incorporated as a Public or a Private Limited Company. So, the process of setting up MFI-NBFC begins with the incorporation of your organization as a Public or Private Limited Company, whichever best suits its needs. Here, at Setindiabiz, we provide services of private and public limited company incorporation through our wholesome and reasonably priced packages. To know more and avail our services, you can visit our official page on company registration in India.

STEP 3 – Ensure Capital Adequacy

An MFI-NBFC must have adequate capital before it files the application to obtain the approval of the RBI. The prescribed capital limit or the net owned funds for the same is Rs.5 crores, which means that the applicant company must have a minimum capital of Rs.5 crores before it applies for the necessary license from the RBI. Note that, this amount is Rs.2 crores for North Eastern states in India.

STEP 4 – Deposit Capital

After the prescribed capital of Rs.5 crores is arranged, the same should be deposited as fixed deposit in an FD account opened in the name of the NBFC in any scheduled commercial bank. Also, a No Lien Certificate must be obtained by the banker.

STEP 5 – Apply for RBI license digitally

The application prescribed for obtaining RBI license is available on the official website of the RBI. The application must be downloaded and must be filled out manually. After filling it out, you are required to submit the application by uploading its scanned copy along with the scanned copy of the required documents. Following a successful submission, an application reference number is generated.

STEP 6 – Submit the application to the RBI regional office

After the application has been submitted digitally, a copy of the application, the application reference number, and the copies of the required documents must be submitted to the Regional Office of the RBI. The concerned authorities then examine the application, and upon successful verification, send the same to the Central Office of the RBI.

STEP 7 – Issuance of RBI license

With a few days of filing the application to obtain a license from the RBI, the RBI issues the license to the applicant company. After receiving the license, the NBFC can begin operating as a microfinance company without any hassle or hindrance.

Micro finance company registration Documents Required

• Duly filled application form with passport-sized photographs of all directors
• KYC of directors and shareholders (Passport, Voter’s ID card, Driving License, Aadhar card, Utility Bills)
• Business Incorporation Certificate
• Income proof of directors and shareholders along with their PAN cards
• Business address proof or rental agreement
• NOC from the owner
• Applicable stamp duty (As per state)
• Any other documents required by the respective authority