License of money lending business in delhi
Vansh Malhotra
(Querist) 17 May 2018
This query is : Resolved
Hi,
I am willing to start money lending business in Delhi and I have heard that I can do so by applying to the Revenue Department. Can you please clarify and provide the procedure for registration?
Thanks
Vansh Malhotra
Ms.Usha Kapoor
(Expert) 18 May 2018
For that you need to get permission from RBI IS REQUIRED. SAEBI permission is not required.
If you are decided to start a money lending business in India legally then you have to get a NBFC certificate.
You should have minimum capital investment of 2 crores then only you can apply for the NBFC.You have to get license under the Money Lending act prevalent in the state you want to start the business and comply with the regulations. Over 17 states have such Acts in place.
With effect from December 6, 2006 the above NBFCs registered with RBI have been reclassified as
• (i) Asset Finance Company (AFC)
• (ii) Investment Company (IC)
• (iii) Loan Company (LC)
RBi permission-is required only for the above 3 NBFC companies. Other than these companies any other financialcompanies do not require RBI permission.
R.Ramachandran
(Expert) 18 May 2018
You have to approach the Deputy Commissioner of your area and submit application seeking grant of licence, in the prescribed Form.
After getting the licence, you have to get yourself registered.
These have to be done under Punjab Money Lenders Act, 1938 which has been extended to Delhi.
You have to necessarily approach the Dy.Commissioner's office and ascertain further details.
Guest
(Expert) 18 May 2018
Why there be the need of any license particularly from SEBI, as advised by Mr. KAVK Satyanarayan and Ms. Usha Kapoor?
Guest
(Expert) 18 May 2018
Why there be the need of any license particularly from SEBI, as advised by Mr. KAVK Satyanarayan and Ms. Usha Kapoor?
Vansh Malhotra
(Querist) 18 May 2018
Thanks to all experts for their valuable opinions.However I am confused with the diverged opinions.
Therefore, kindly share some platform where i can confirm whether i have register as NBFC under RBI or Money Lender Firm under Delhi Money Lenders Act.
Thanks.
Guest
(Expert) 18 May 2018
Dear Shri Vansh malhotra,
So far as registration/ license for the business of money lender is concerned, you will be governed by the Money Lenders Act, as advised by Shri Ramachandran. So for the purpose of license, you will have to approach the concerned DM.
Further, since it is a business related to debt and deposit matters, being responsible for economy, currency, debrts & deposits, the transactions are governed by the regulations issued by the RBI. So, you will have to register with the RBI, as NBFC, may be a public limited or a private limited company or an MSME, for the purpose.
SEBI's involvement may not arise, if you don't propose to issue shares of your company for trading through stock exchange, as a public limited company.
Vansh Malhotra
(Querist) 19 May 2018
Shri Dhingra Ji,
As per your advice I need to register first with the DM (Revenue) and then with the RBI as NBFC.
In the Punjab Money Lenders Act, 1938 as applicable to Delhi, there is no such provision regarding registration with RBI. Can you pls clarify on this?
Thanks.
T. Kalaiselvan, Advocate
(Expert) 19 May 2018
The Punjab Money lenders registration act is applicable for Delhi also and under this law, the money lender has to register his company if not he may nto be eligible to file recovery suit as an unregistered company.
The revenue department is not associated to this for licence or any other reason.
Vansh Malhotra
(Querist) 20 May 2018
Mr. T Kalaiselvan,
So where do I need to register under Punjab Money Lenders Act as extended to Delhi?
Thanks.
Ms.Usha Kapoor
(Expert) 21 May 2018
The same answer as above gi9ven by me can also be given in the following way.
If an individual’s total income due to lending exceeds 70% he needs a licence to start money lending business in India.
Regarding Lenders licence refer the following link.. Refer the following link for further information on this issue.
https://www.quora.com/Do-Lenders-need-Money-Lender-License-in-India-Delhi-if-they-lend-through-Peer-2-Peer-lending-websites
Also refer the following link for is it legal to start money lending business in India.
https://www.quora.com/Is-it-legal-for-an-individual-to-lend-money-to-other-at-an-interest-rate-in-India
Vansh Malhotra
(Querist) 22 May 2018
Ms. Usha Kapoor,
Thanks for sharing the valuable information through above link. However I got maximum info from above link except the exact procedure for registration with the District Collector under Punjab Registration of Money Lenders Act, 1938 as applicable to Delhi.
Can anyone please share such registration procedure?
Thanks.
