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What are eligibility criteria for microfinance company Registration in Kolkata?

The regulatory environment in India does not permit anyone except a Non-Banking Finance Company (NBFC) authorised by the Reserve Bank of India (RBI), to engage into financial services. However, some relaxations are given by RBI to certain sectors/Businesses for conducting financial activities till a defined limit.

Consequently, there four methods by which the microfinance registration is applied for in an organization:

1. NBFCs (Non-Banking Financial Companies) registered with RBI.

2. Section 8 Companies — These are companies incorporated under Section 8 of the Companies Act,2013.

Process of microfinance company registration in Kolkata (Either by NBFC or Section 8 Company) Both methods differ, but the requirements and procedure are somewhat similar.

Eligibility Criteria NBFC Section 8 Company

RBI NOC Applicable Not Required

Net Owned Funds Minimum 5 crores No minimum requirement.

Central Director Experience (Director Time) At least one director with 10+ yrs of ownership experience No prior owner/operator requirement

Allowed loan limit Maximum 10% of total assets Secured or unsecured not exceeding ₹50,000 ₹1.25 lakh

Microfinance Registration Process Complexity High Simpler, as it is a non-profit organization

Compliances Strict compliance to NBFC rules Adhere to RBI, but lesser requirements

Members Min 2 (Private) or 7 a Public () Minimum member: Number of Members, Min 2 turning to Minimum of two members

Organisation Type Profit Driven Non-Profit

How to register for NBFC microfinance Kolkata?

The following are the steps you need to follow in order for you to register as a microfinance company through an NBFC:

1. Register a company: Private company (min. 2 members, ₹1 lakh) or a public company (min. 7 members).
2. You need net owned funds of ₹5 crore (₹2 crore if you are targeting the northeastern region) against an NBFC Raise capital.
3. DEPOSIT CAPITAL: Deposit the capital in a bank as an FD and get NO LIEN from your Bank.
4. Licensing: Fill the application form online along with certified documents viz Memorandum of Association, Incorporation Certificate and Net Worth Certificate of Directors. Finally, you can apply by submitting the application form at your concerned Regional Office of the Reserve Bank.

Microfinance in Kolkata Registration Required Documents

The required primary documents are PAN copies, ID proofs, address proof such as voters card or passport etc. In addition to the photograph of directors which is a mandatory document with any other legal requirements if needed by law.

On the flip side, registering as a Section 8 Company includes:

1. Apply for Digital Signature Certificate and Director Identification Number.
2. Obtain name approval in Form INC-1 (the company’s proposed title should suggest “sanstha” or “foundation”),
3. To file Memorandum of Association (MOA) and Articles of Association (AOA).
4. As you have already given the license to use your service as mentioned in above step, after that they also want some more confidential like Incorporation certificate & Form INC-12 etc. It will be file by them with this document and need a proper verification from ROC department.

How much money is needed to start the microfinance company in Kolkata?

NBFC requires a minimum of ₹5 crore whereas in Section 8 company there is no such requirement.

Benefits and Advantages of Registering a Microfinance Company As Section 8 Company In Kolkata

Section 8 companies have lesser compliance requirements and are easier to get registered, but their ability to lend is also limited

Regulation of Microfinance Institutions in Kolkata by the Reserve Bank of India

The Reserve Bank of India (RBI) manages all NBFCs under broad-brushed compliance directives, such as regulated mandates relating to lending limits and other regulatory sanctions.

It is stamping duty for registration of a microfinance company in Kolkata?

To know exact rates, you must check with your local authorities because each state has its own set of rules and regulations regarding stamp duty.

What is the duration of micro finance company registration in Kolkata?

NBFCs — Days as P2P lending involves heavy regulations especially for NBFC registration whereas going into Section 8 Co takes less time.

What are the regulations for microfinance company in Kolkata?

Based on NBFC or Section 8 compliance. While Section 8 companies too must comply with the RBI’s guidelines, NBFCs have to meet more rigorous requirements.

All in all, assessing these factors will help the companies to tailor make a choice on which entry strategy is best for their microfinance business.