What are the requirements for NBFC-AA Registration?

NBFCs or Non-Banking Financial Companies are financial institutions that are engaged in activities such as the acquisition of shares, debentures, and securities. Lending and borrowing money are two major activities of an NBFC. It is important for an individual to choose one of the types of NBFCs before proceeding to other steps in its establishment. In this article, we will talk in detail about NBFC-AA Registration, its features, and documents required for registration purposes. RBI is the authority that is involved in the regulation of NBFC – AA.

What is NBFC-AA Registration?

AA refers to Account Aggregator are entities that enable the sharing of financial data to several financial institutions. It ensures that the record of all the data is maintained and data is secure. NBFC-AA Registration is the process of registering the company as NBFC-AA, after which services with regards to account aggregation is offered.

The two individuals involved in this process are –

• Financial Information Provider (FIP)
• Financial Information User (FIU)

What are the benefits of NBFC-AA Registration?

Non-Banking Financial Company-Account Aggregators (NBFC-AA)have several advantages, in this section, we will talk about various benefits that it offers to institutions and companies.

• It gives information with regards to the accounts held by customers
• All the financial information is kept in an appropriate manner
• The information provided by the aggregators is done in an organized and accurate manner to the customers.

What are the minimum requirements for NBFC-AA Registration?

In order to obtain a license to operate as an NBFC Account Aggregators, the individual must fulfill certain minimum requirements. In this section, we will discuss all the requirements –

• There is a requirement of a minimum amount of INR 2 Crores
• Once the license is received, the individuals cannot provide any other service other than account aggregation
• After the company receives approval from the authority, a minimum of 12 months is given to them to place all necessary things they might need to run the business.

What is the registration process for NBFC-AA Registration?

The process of registering NBFC Account Aggregators involves steps, which are undertaken by the applicant to obtain a license. NBFC-AA Registration can be successful only if all the steps are completed within a given time period.

• The Company must obtain registration, according to the Companies Act, 2013
• Details of the resources must be submitted to the authority
• The company must ensure that they contain the necessary capital structure that is required to run the company
• Ensure all the members of the company fall under the ‘Fit and Proper’ criteria
• An Information Technology System plan must be prepared by the company
• The leverage ratio of the company must be maintained
• The company receives the certificate of registration
• The company must have a minimum amount of INR 2 Crores

What are the fit and proper criteria for Promoters to obtain NBFC-AA Registration?

• Draft a strategy and include all important conditions that would define the fit and proper criteria
• The strategy is created on the basis of the guidelines issued by RBI
• The directors, managing directors obtain a declaration
• A covenant deed is obtained by the directors

What documents are required for NBFC Registration?

Documentation is a mandatory step and thus all the documents must be prepared and submitted to the authority on or before the prescribed time period.

Documents required to obtain NBFC License are as follows –

• Copies of Certificate of Commencement of Business and Certificate of Incorporation of the Non-Banking Financial Company
• Memorandum of Association (MOA) and Articles of Association (AOA) of the company, which is prepared with all the important details about the company
• Copies of PAN or CIN which is created in the company’s name
• The profile of the director filled and signed by every director
• Experience certificate of the directors from the NBFCs from where the Directors have gained experience related to NBFC
• CIBIL Data which includes information about the directors of the company
• A copy of the Board Resolution for the presentation of Fair Practices Code
• Board Resolution particularly approving the submission of the application and authorizing signatory.

Conclusion

NBFC-AA Registration is simple and requires a certain step. If these steps are followed by individuals in a proper manner, it leads to the successful incorporation of the company. The company can, then, start business activities and provide services that it specializes in.