NBFC Collaboration Process in India.
The NBFCs are registered under the Companies Act of 2013 and deal with loans and advances, purchase of shares, stocks, bonds, and securities issued by the government. NBFCs are financial institutions that operate under the rules and regulations prescribed by the Reserve Bank of India (RBI). Besides, these rules and regulations change from time to time depending on the situation. For NBFC to function properly, management must be aware of any mandatory compliance. Also, management must know how the NBFC works and works, what to do and how to do it. Therefore, all NBFCs must keep abreast of each new rule.
Here in this blog, we will read what they do before the annual NBFC compliance.
What is the difference between banks and NBFC
- The NBFC cannot accept demand deposits.
- NBFCs are not part of the payment and settlement system and cannot issue checks without funds.
- Unlike banks, the deposit guarantee system of the deposit guarantee system and the credit guarantee company is not accessible to NBFC depositors.
Examples of NBFC in India
- Indiabulls Housing Finance is the second-largest financial company in India managed by the National Housing Bank.
- Reliable Capital is an Indian financial services company sponsored by Anil Dhirubhai Ambani.
The functions NBFC
- Offers loans and advances
- Acquisition of shares, bonds, stocks, bonds, securities and bonds issued by the government.
List of NBFCs that do not require registration in the RBI
The following NBFCs are not required to register with the Reserve Bank of India:-
- Main investment companies (assets are less than Rs 100 million or no public funds are used)
- Commercial banks.
- Real estate financing company.
- Companies that operate in the venture capital sector.
- Companies were active in the stock market.
- Insurance company with a certificate of registration issued by IRDA.
- Chit Fund companies as defined in section 2 (b) of the Chit Fund Act of 1982
We can divide NBFC into two types, one is the type of activity and the other is the deposits. There are now eight types like the activity: asset financing company, investment company, loan company, infrastructure company, basic investment company, microfinance company, housing finance
company. and mortgage guarantee company. Deposits consist of two segments: one is the deposit method for NBFC and the other is the company that does not accept deposits.
NBFC Collaboration Process
The NBFC Cooperation procedure between fintech companies and non-bank financial companies are as follows:-
- The signing of the joint venture agreement (NBFC and Fintech Company).
- Sign the deposit agreement between companies with a fund manager.
- The NBFC must sign a platform service contract for the payment of fintech for technological services.
- Open an ESCROW account for reimbursement and reimbursement.
- Hire an auditor to properly manage the funds.
- Conformities such as GST, TDS, CKYC, credit report
- Monthly voting reports and CIC
Overview of NBFC collaboration
NBFC Collaboration is a recently introduced term in which non-bank financial companies work with banks or financial technology companies. Companies that hold the NBFC license can work with other companies.
The objective of this collaboration is to find cost effective ways to collect donations, win customers and win customers.
Checklist for documents Required
- Documents required to register as NBFC-P2P
- Documents needed to register NBFC factors
- Documents required to register as IDF-NBFC
- Documents required to register as NBFC
- Documents needed to register NBFC-MFI – New companies
- Documents required to register as an infrastructure financing company
- Documents required to register as CIC-ND-SI
- Documents required to register NBFC MFIs (existing NBFCs)
The NBFC collaboration has proven to be an effective and efficient business partnership between two companies, given the benefits. Some of them are a better understanding of customer preferences, detailed data analysis, and better decision making.
Companies choose to collaborate based on technological advances and the understanding that the combination is beneficial for both.