A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 2013 of India, engaged in the business of loans and advances, acquisition of shares, stock, bonds hire-purchase, insurance business or chit business but does not include any institution whose principal business includes agriculture, industrial activity or the sale, purchase or construction of immovable property.

The working and operations of NBFCs are regulated by the Reserve Bank of India (RBI) within the framework of the [Reserve Bank of India Act, 1934] and the directions issued by it.

Note: Non- Banking finance Company can be formed and operated in the form of Private Limited or Public Limited accordingly their respective requirements will be applicable.

1. Capital:

• There are 2 types of capital i.e. Authorize Capital (It is the capital up to which Company is authorize to raise from the member and it can be increase as and when required.), Paid Up Capital (It is the capital which is paid up by the members of the company and it can be increase as and when required.)
• The requirement for minimum capital or Net Owned Funds* is INR 200 Lakhs.

*NOF Means The Term ‘NOF’ Means, Owned Funds (Paid-Up Capital And Free Reserves Minus Accumulated Losses, Deferred Revenue Expenditure And Other Intangible Assets) Less, (I) Investments In Shares Of Subsidiaries/Companies In The Same Group/ All Other NBFCs; And (II) The Book Value Of Debentures/Bonds/ Outstanding Loans And Advances, Including Hire-Purchase And Lease Finance Made To, And Deposits With, Subsidiaries/ Companies In The Same Group, In Excess Of 10% Of The Owned Funds.

2. Registered Office:

• Any place can be made as the registered office of the NBFC even the residential place can be used as the registered office of the NBFC.

Note: Only those NBFCS Holding a valid Certificate of Registration can Accept/Hold Public Deposits.

3. Registering Authority:

• Ministry of Corporate Affairs 
• Reserve Bank of India