Micro Finance Company Registration in India

NBFC shall not have more than 10% of its total assets as loans meeting “Qualifying Assets” criteria as defined in the Directions. NBFCs are required to abide by the guidelines issued to NBFCs in general, regarding the terms and conditions of these loans. 

A maximum of 50% of the aggregate amount of loans may be extended for other purposes such as housing repairs, education, medical and other emergencies.   The aggregate amount of loans given to a borrower for income generation should constitute at least 50% of the total loans from the NBFC-MFI.  

Home loans generally have mortgages on a dwelling unit. If all conditions as applicable for qualifying assets including collateral-free loans and not less than 50% of the loan for income generation purpose are met, these may be treated as qualifying assets.  

NBFC Registration Process involves intense documentation which can be seen on the website of RBI→ Regulation → Non-Banking → Forms → Documents required for registration of NBFC-MFI 

Processing fees should be booked in the same accounting period in which these are paid/ received and amortization of the same is not permitted in future years.  

Yes, an NBFC-MFI can charge a differential rate of interest to its customers but the variance for individual loans between the minimum and maximum interest rate cannot exceed 4 percent.  

No, an NBFC cannot impose a penalty on the prepayment of loans. 

RBI has made it mandatory for the Company taking NBFC Registration Service to prominently display in all its offices and the literature issued by it and on its website, the effective rate of interest being charged by it.  

Yes,  Every Company taking NBFC Registration Service has to be a member of all Credit Information Companies (CICs) established under the CIC Regulation Act 2005  

The moratorium shall not be less than the frequency of repayment. For example, in the case of the monthly repayment, the moratorium shall not be less than one month.  

No, the credit concentration norms are not applicable to NBFC-MFIs. 

No, Membership in the SRO is not mandatory. However, companies taking NBFC Registration Service are encouraged to voluntarily become members of at least one SRO.