Mandatory Registration for NBFC

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CA Ritu Chauhan (Querist)
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06 January 2024 A company whose principal business is to run a playgroup for toddlers, parks its surplus funds in shares & securities of listed companies. Over a period of time these financial asset (shares & securities) exceeds 50% of the total assets of the company. Income from such assets also exceeds 50% of gross income of the company thereby fulfilling 50-50 Asset Income Test of RBI. Whether this company is required to obtain registration as NBFC from RBI even if its principal business is not that of NBFC.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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14 January 2024 A non-banking institution that is a company and has principal business of receiving deposits under any scheme or arrangement by any mode is also a non-banking financial company (Residuary non-banking company).

Exclusions from the definition: The NBFC business does not include business whose principal business is the following:

Agricultural Activity
Industrial Activity
Purchase or sale of any goods excluding securities
Sale/purchase/construction of any immovable property – Providing of any services

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