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Investment And Credit Company – All You Should Know?

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Introduction

Investment and Credit Company, in short β€˜ICC’ is Company incorporated under the Companies Act, 2013 having objects to do business of lending and investment, public at large. It required the regulatory approval to commence the business. The regulator regulating the Investment and Credit Company, ICC is Reserve Bank of India, categorized as Non-Banking Finance Company. It is non deposit taking, category II as per classification of Reserve Bank of India. So, conclusively it is company with object of doing finance business incorporated under Companies Act, 2013 and regulated by Reserve Bank of India.

The growing pace of financial business with better future prospect, makes people do start this business. The technology innovation involved in financial business is also market catchy in order to scalability and business expansion. The combination of technology on finance business, as past trend has help finance business people to reach at large audience and deliver the finance service to end users. Beside this the return on investment on this industry is also significant, to capitalize the effort on getting registered and operate the finance business. The company can work on ambitious project called financial inclusion program of Government and Regulator to make reach of accessibility credit to public at large, with no or less hurdles. Therefore, it is also in good need of people to come to start finance business to fill the gap between existing finance service provider and end users, to get the people on mainstream channelized finance sector. 

Read Our Blog: How to Start a Finance Company in India?

Any group of Individual or corporate as stakeholder can register the company with Ministry of Corporate Affairs with an object to run finance business. Company incorporation is most with stated object and name reflecting the object of company vide Companies Incorporation Rule, 2014 as per the provision of Companies Act, 2013. Incorporating company will take around 10-15 working days to start from scratch and getting approval from Ministry of Corporate Affairs. Director of company to be shortlisted as per the Requirement of Companies Act, 2013 and Reserve Bank of India guidelines is most to start the company with finance objects as ultimately the Company need to go for detailed screening of Reserve Bank of India. So, the Company need to be incorporated with at least INR 200 Lakh as contribution from its stakeholder, to be freeze in Company Bank Account as Fixed/Term Deposit unless the Certificate of Registration (CoR) is not obtained from the Regulator Reserve Bank of India. As such amount can be utilized for the business once approval from regulator is obtained. The Board of director should possess the finance business knowledge and prior experience of organized finance sector is most preferable. On obvious ground, Board of Director should have educational qualification and pose the reputation, dignity and integrity with no civil or criminal cases even the case of Section 138 of Negotiable Instrument Act. Once this things are been clear up with people at pre requisite to start the company for finance business, now it is ready to proceed further.  

Any company registered with finance business to start with, required approval from Reserve Bank of India unless otherwise specifically specified. Therefore, company and its director and shareholder are scrutinized at very minute level to get the regulatory requirement before company being honored with Certificate of Registration. Once it’s been clear with Reserve Bank of India scrutiny, in approx., time frame of 90-120 working days they provide the Certificate of Registration (CoR) to Company start with finance business as Non-Banking Financial Company, Non-Deposit Taking, Category II termed as NBFC-ICC.

Read Our Blog: Investment and Credit Company (NBFC-ICC)

Understanding the basic inputs on above paragraphs, now the basic questions in mind is how it can be applied and who is going to help us to get the process streamline as per the regulatory framework, as the involvement of Companies Act, 2013 and Regulator Reserve Bank of India Act, 1934 along with its Master Direction, Circular and Notification gets the process quite lengthy, absolute drafting and regular follow-ups in addition to timely response of their queries during the process of Registration. It ask good time to get correct documents and draft as per Reserve Bank of India norms and terms. So that Company can avoid the return and rejection case, to the extent possible with best inputs put on into application file to regulator Reserve Bank of India. As it is very clear and loud, either the case of return or rejection consequences further complexities on compliance and the Director on Board be defaulted from being filing application again on Regulator. 

We can manage the pre incorporation requirements i.e. entry stage discussion and finalization, incorporation process and entire application process with our expert knowledge based on past experience to the extent reduce the risk of return and rejection due to blunder. Regular follow ups and submission of regulator query on time is basic requirement of application process. Entire idea stage to operational stage support is our support to our esteemed clientele.

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Author
Vinay Singh
Vinay Thakur is Managing Partner in Corpseed. He focused on payments, digital transformation, and financial technology for over 15 years and holds strong expertise on fintech startups, banking innovation, and investors with a keen understanding of the trends and activities of startups, banks, and investors in the space.