{"id":17888,"date":"2020-10-14T15:30:14","date_gmt":"2020-10-14T10:00:14","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=17888"},"modified":"2024-12-09T18:18:20","modified_gmt":"2024-12-09T12:48:20","slug":"exemptions-from-registration-as-nbfc-by-reserve-bank-of-india","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/exemptions-from-registration-as-nbfc-by-reserve-bank-of-india\/","title":{"rendered":"Synopsis on Exemptions from Registration as NBFC by Reserve Bank of India"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The Reserve Bank of India, while conferring their powers in the public interest U\/s 45NC of the Reserve Bank of India Act, 1934 enables to exempts certain categories of non-banking financial companies as provided below from certain provisions of the same Act as mentioned below. Lets understand the concept of Exemptions from <a href=\"https:\/\/corpbiz.io\/nbfc-registration\"><strong>Registration as<\/strong> <strong>NBFC<\/strong><\/a> by RBI.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><img decoding=\"async\" width=\"752\" height=\"504\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/10\/image-48.png\" alt=\"Exemptions from Registration as NBFC by Reserve Bank of India\" class=\"wp-image-17889\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/10\/image-48.png 752w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/10\/image-48-300x201.png 300w\" sizes=\"(max-width: 752px) 100vw, 752px\" \/><\/figure><\/div>\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/step-by-step-nbfc-registration-procedure\/\">NBFC Registration: Step by Step Procedure<\/a><\/mark><\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/exemptions-from-registration-as-nbfc-by-reserve-bank-of-india\/#Exemptions_from_Registration_as_NBFC_under_Provisions_of_Chapter_III_B_of_the_RBI_Act_1934\" >Exemptions from Registration as NBFC under Provisions of Chapter III B of the RBI Act, 1934<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/exemptions-from-registration-as-nbfc-by-reserve-bank-of-india\/#Exemption_under_sections_45-IA_45-IB_and_45-IC_of_the_Reserve_Bank_of_India_Act_1934\" >Exemption under sections 45-IA,\n45-IB and 45-IC of the Reserve Bank of India Act, 1934<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/exemptions-from-registration-as-nbfc-by-reserve-bank-of-india\/#Exemption_under_sections_45-IB_and_45-IC_of_the_Reserve_Bank_of_India_Act_1934\" >Exemption under sections 45-IB and 45-IC of the Reserve\nBank of India Act, 1934<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/exemptions-from-registration-as-nbfc-by-reserve-bank-of-india\/#Exemption_under_sections_45-IA_45-IB_45-IC_45-MB_and_45-MC_of_the_Reserve_Bank_of_India_Act_1934\" >Exemption under sections 45-IA, 45-IB, 45-IC, 45-MB and 45-MC of the Reserve Bank of India Act, 1934<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/exemptions-from-registration-as-nbfc-by-reserve-bank-of-india\/#Exemption_under_the_sections_45-IA_and_45-IC_of_the_Reserve_Bank_of_India_Act_1934\" >Exemption under the sections 45-IA and 45-IC of the Reserve Bank of India Act,\n1934<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/exemptions-from-registration-as-nbfc-by-reserve-bank-of-india\/#Exemption_under_the_section_45-IA_of_the_Reserve_Bank_of_India_Act_1934\" >Exemption under the section 45-IA of the Reserve Bank of India Act, 1934<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/exemptions-from-registration-as-nbfc-by-reserve-bank-of-india\/#Exemption_under_section_45-IA_1_b_of_the_Reserve_Bank_of_India_Act_1934\" >Exemption under section 45-IA (1) (b) of the Reserve Bank of India Act,\n1934<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/corpbiz.io\/learning\/exemptions-from-registration-as-nbfc-by-reserve-bank-of-india\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Exemptions_from_Registration_as_NBFC_under_Provisions_of_Chapter_III_B_of_the_RBI_Act_1934\"><\/span>Exemptions from Registration as NBFC under Provisions of Chapter III B of the RBI Act, 1934 <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A Non-Banking institution is authorized to operate the payment system and to issue <strong><a href=\"https:\/\/corpbiz.io\/prepaid-wallet-license\">prepaid payment instruments<\/a><\/strong> under Payment &amp; Settlement Systems Act, 2007. The exemption must be limited and restricted to money received by such non-banking institution for issue of prepaid payment instruments.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Exemption_under_sections_45-IA_45-IB_and_45-IC_of_the_Reserve_Bank_of_India_Act_1934\"><\/span>Exemption under sections 45-IA,\n45-IB and 45-IC of the Reserve Bank of India Act, 1934<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Exemption from the sections 45-IA, 45-IB and 45-IC of the Reserve Bank of India Act, 1934 for <a href=\"https:\/\/corpbiz.io\/microfinance-company-registration\"><strong>Micro Finance companies<\/strong><\/a> and Micro Finance, Securitisation and Reconstruction, Nidhi, Mutual Benefit, Chit, Merchant Banking &amp; Mortgage Guarantee Companies are as follows:-<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">(i) Micro Finance Companies- Any\nnon-banking financial company <\/h3>\n\n\n\n<ul>\n<li>Engaged in micro financing activities, that\nprovides credit not exceeding \u20b950,000 for a business enterprise <\/li>\n\n\n\n<li>Not accepting public deposits in accordance with\nsub-paragraph (xiii) of paragraph 3 of Non-Banking Financial Companies\nAcceptance of Public Deposits under Reserve Bank of India Directions, 2016.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">(ii) Securitisation and\nReconstruction Companies<\/h3>\n\n\n\n<p>Securitisation Company\nor Reconstruction Company as registered with Bank under section 3 of the Securitisation\n&amp; Reconstruction of Financial Assets and Enforcement of Security Interest\nAct, 2002.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">(iii) Nidhi Companies<\/h3>\n\n\n\n<p>A non-banking\nfinancial company under the Companies Act incorporated as Nidhi Company.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">(iv) Mutual Benefit Companies<\/h3>\n\n\n\n<p>A mutual benefit\ncompany as propounded in sub-paragraph (x) of paragraph 3 of Non-Banking\nFinancial Companies Acceptance of Public Deposits under Reserve Bank of India Directions,\n2016.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">(v) Chit Companies<\/h3>\n\n\n\n<p>Involves inthe\nbusiness of chits incorporated under &#8211; as defined in clause (b) of section 2 of\nthe Chit Funds Act, 1982<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">(vi) Mortgage Guarantee\nCompanies<\/h3>\n\n\n\n<p>With the prior approval of the Central Government in respect of section 45 I (f) (iii) of the Reserve Bank of India Act, 1934, a <a href=\"https:\/\/corpbiz.io\/company-registration\"><strong>company registered<\/strong><\/a> with the Bank exempted under the specified scheme for registration of Mortgage Guarantee Companies.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">(vii) Merchant Banking Companies<\/h3>\n\n\n\n<p><strong><em>&nbsp;Subject to compliance with the following conditions:<\/em><\/strong><\/p>\n\n\n\n<ul>\n<li>Merchant Banker &nbsp;registered U\/s 12 of the Securities and\nExchange Board of India Act, 1992 acquires securities only for the operational\nparts of merchant banking business<\/li>\n\n\n\n<li>It does not carry on any other financial\nactivity referred to in section 45I(c) of the Reserve Bank of India Act, 1934<\/li>\n\n\n\n<li>It does not accept or hold public deposits <\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Exemption_under_sections_45-IB_and_45-IC_of_the_Reserve_Bank_of_India_Act_1934\"><\/span>Exemption under sections 45-IB and 45-IC of the Reserve\nBank of India Act, 1934<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">Government Companies<\/h3>\n\n\n\n<p>As specified\nunder section 45-I (f) of the Reserve Bank of India Act being a Government\ncompany under the definition in Clause (45) of Section 2 of Companies Act, 2013\nis also exempted.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Exemption_under_sections_45-IA_45-IB_45-IC_45-MB_and_45-MC_of_the_Reserve_Bank_of_India_Act_1934\"><\/span>Exemption under sections 45-IA, 45-IB, 45-IC, 45-MB and 45-MC of the Reserve Bank of India Act, 1934<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Exemption under sections 45-IA, 45-IB, 45-IC, 45-MB and\n45-MC of the Reserve Bank of India Act, 1934\nfor Insurance Companies, Stock brokers or sub-brokers &amp; Stock Exchanges are\nas follows:-<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Insurance Companies<\/h3>\n\n\n\n<p>Doing insurance\nbusiness, holding a valid certificate of registration issued under section 3 of\nthe Insurance Act, 1938<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Stock Exchanges<\/h3>\n\n\n\n<p>A stock exchange\ncompany, as recognised under section 4 of the Securities Contracts (Regulation)\nAct, 1956<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Stock brokers or sub-brokers<\/h3>\n\n\n\n<p>Doing a business\nof a stock-broker or sub-broker that holds a valid certificate of registration\nobtained U\/s 12 of the Securities &amp; Exchange Board of India Act, 1992<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Exemption_under_the_sections_45-IA_and_45-IC_of_the_Reserve_Bank_of_India_Act_1934\"><\/span>Exemption under the sections 45-IA and 45-IC of the Reserve Bank of India Act,\n1934<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">Alternative Investment Fund<\/h3>\n\n\n\n<p>Companies which is an <a href=\"https:\/\/corpbiz.io\/alternative-investment-fund-registration\"><strong>Alternative Investment Fund company<\/strong><\/a> holding a certificate of registration obtained U\/s 12 of the Securities &amp; Exchange Board of India Act, 1992<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Exemption_under_the_section_45-IA_of_the_Reserve_Bank_of_India_Act_1934\"><\/span>Exemption under the section 45-IA of the Reserve Bank of India Act, 1934<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Exemption from the section 45-IA of the Reserve Bank of India Act, 1934 for <a href=\"https:\/\/corpbiz.io\/housing-finance-company-registration\"><strong>Housing Finance Institutions<\/strong><\/a>, and Unregistered Core Investment Companies are as follows:-<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Housing Finance Institutions<\/h3>\n\n\n\n<p>A housing finance\ninstitution defined under Section 2 (d) of the National Housing Bank Act, 1987.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Unregistered Core Investment\nCompanies<\/h3>\n\n\n\n<p>A Core Investment\nCompany as stated at para 6 of the Core Investment Companies (Reserve Bank of\nIndia) Directions, 2016.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Exemption_under_section_45-IA_1_b_of_the_Reserve_Bank_of_India_Act_1934\"><\/span>Exemption under section 45-IA (1) (b) of the Reserve Bank of India Act,\n1934<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Core Investment Companies<\/strong><\/h3>\n\n\n\n<p>A Core Investment\nCompany as defined in clause (viii) of paragraph 3, sub-paragraph (1) of the\nCore Investment Companies (Reserve Bank of India) Directions, 2016, which meets\nthe capital requirements and leverage ratio as specified in the Reserve Bank of\nIndia directions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In the above said article, a reference has got invited to para-5 of Master Directions on Exemptions from Registration as NBFC from the provisions of <strong><em>Reserve Bank of India Act, 1934<\/em><\/strong><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Reserve_Bank_of_India_Act,_1934\"><strong><em>[1]<\/em><\/strong><\/a><\/sup> on August 25, 2016. It is said that all the Venture capital fund companies which are holding a certificate of registration U\/s 12 of the SEBI (Securities and Exchange Board of India) Act, 1992 (Act 15 of 1992) &amp; not holding or accepting public deposit are exempted from the provisions of sec. 45-IA &amp; 45-IC of the Reserve Bank of India Act, 1934 along with the applicability of guidelines issued by the Bank for NBFCs.<\/p>\n\n\n\n<p>The consequential upon the repeal of <strong><a href=\"https:\/\/corpbiz.io\/sebi\">SEBI <\/a><\/strong>(Securities and Exchange Board of India) Venture Capital Funds Regulations, 1996 and enactment of SEBI Alternative Investment Funds Regulations, 2012, it has been decided to substitute the terminology \u00a0\u201cVenture Capital Fund Companies\u201d with \u201cAlternative Investment Fund Companies\u201d, in accordance to the powers conferred under section 45NC of Reserve Bank of India Act, 1934.\u2019 Call the <a href=\"https:\/\/corpbiz.io\/\"><strong>CorpBiz<\/strong><\/a> experts to avail NBFC registration without any technical or legal hassles.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/procedure-for-appeal-against-cancellation-of-nbfc-registration-by-rbi\/\">Procedure for Appeal against Cancellation of NBFC Registration by RBI<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Reserve Bank of India, while conferring their powers in the public interest U\/s 45NC of the Reserve Bank of India Act, 1934 enables to exempts certain categories of non-banking financial companies as provided below from certain provisions of the same Act as mentioned below. Lets understand the concept of Exemptions from Registration as NBFC [&hellip;]<\/p>\n","protected":false},"author":10,"featured_media":17923,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[91],"tags":[1103],"acf":{"service_id":"8"},"authorName":"Soumya Bajpai","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/01\/0.jpg","authorDescription":"Soumya has done LLB (Hons) and has a 2+years experience in writing. Her main interest is in reading judgments, new enactments and amendments taking around in law. She always strives to bring the best to work that she does.","postViews":13130,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/17888"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=17888"}],"version-history":[{"count":8,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/17888\/revisions"}],"predecessor-version":[{"id":67680,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/17888\/revisions\/67680"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/17923"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=17888"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=17888"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=17888"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}