Any Non-Banking company carrying business of financial institution as its “principle business” will be a Non-Banking Financial Company more commonly known as “NBFC”.

Activities included in the definition of financial institutions:

– Financing,

– Whether by giving loans, advances or otherwise

– Acquisition of shares, stocks or securities

– Hire purchase

– Insurance – excluded by notification

Exclusion to NBFC:

– If principal business is industrial, trading, etc.

In India, the profession of chartered accountancy is regulated by the Institute of Chartered Accountants of India which was established by Parliament under the Chartered Accountants Act of 1949. Since then, the term Chartered Accountant has been used in place of Indian Registered Accountant. Prior to 1949, Restricted State Auditors were registered with the respective princely states and British provincial State Governments. However, now, the Restricted State Auditors have become redundant.

ICAI continues to keep the membership alive through yearly payment of prescribed fees. Associate member of the ICAI are only entitled to use the designation of Chartered Accountant along his name and also use the designatory letters as CA. as prefix to his name from 07-08-2009. Members who are in full-time practice, and have completed 5 years of practice, can add F.C.A. as prefix to their names.[9]

As of May 2012, ICAI had more than 193,500 registered members.[10] It has three levels – CPT (Common Proficiency Test), then IPCC(Integrated Professional Competence Course) , after which one undergoes a 2.5 year training period as Article Clerk in an Auditing Firm, or under a senior auditor. After this period, they write the Final Exams and obtain the result. After final exams also there is 4 – 6 month training. Overall it is almost 3 years training. Totally to complete ca it takes 4.5yrs.

A company incorporated under the Companies Act, 2013 and desirous of commencing business of non-banking financial institution as defined under Section 45 I(a) of the RBI Act, 1934 should comply with the following:

– it should be a company registered under The Companies Act, 2013

– It should have a minimum net owned fund of Rs. 200 lakh.

Different type of NBFC may have different documentation requirements, below are few basic documentation requirements: –

– Certified copies of Certificate of Incorporation and Certificate of Commencement of Business in case of public limited companies.

– Certified copies of extract of only the main object clause in the MOA relating to the financial business.

– Board resolution stating that:

a) the company is not carrying on any NBFC activity/stopped NBFC activity and will not carry on/commence the same before getting registration from RBI

b) the company has not accepted any public deposit, in the past (specify period)/does not hold any public deposit as on the date and will not accept the same in future without the prior approval of Reserve Bank of India

c) the company has formulated “Fair Practices Code” as per RBI Guidelines

– Copy of Fixed Deposit receipt & bankers certificate of no lien indicating balances in support of NOF

– For companies already in existence, the Audited balance sheet and Profit & Loss account along with directors & auditors report or for the entire period the company is in existence, or for last three years, whichever is less, should be submitted

– Copy of the certificate of highest educational and professional qualification in respect of all the directors

– Banker’s report in respect of applicant company, its group/subsidiary/associate/holding company/related parties, directors of the applicant company having substantial interest in other companies The Banker’s report should be about the dealings of these entities with these bankers as a depositing entity or a borrowing entity.

– Certificate from Statutory Auditor / Chartered Accountant.