In India, housing finance companies (HFCs) are regulated by the National Housing Bank (NHB) and are involved in providing financing for housing-related activities. If you are interested in starting a housing finance company, here are the general requirements and procedure for registration:
Requirements for Housing Finance Company Registration:
Company Registration: The applicant must register a non-banking financial company (NBFC) under the Companies Act, 2013 or any other relevant law in force. The company should be registered as a public limited company.
Capital Requirement: The applicant must fulfill the minimum capital requirement specified by the NHB. The specific amount may vary based on the type and nature of the housing finance activities.
Management Team: The applicant should have a competent management team with relevant experience and expertise in housing finance operations.
Business Plan: Prepare a comprehensive business plan that outlines the objectives, target market, products, services, operational strategy, and financial projections of the housing finance company.
Fit and Proper Criteria: The directors and key management personnel should meet the "fit and proper" criteria as prescribed by the NHB.
Procedure for Housing Finance Company Registration:
Application Submission: Prepare the necessary documents and submit the application for housing finance company registration to the Regional Office of the NHB.
Background Verification: The NHB conducts background checks on the applicant, including the directors and key management personnel, to ensure their eligibility and compliance with regulatory requirements.
Capital Contribution: The applicant must contribute the required capital as per the guidelines specified by the NHB.
Documentation: Provide all the required documents, such as the company's incorporation certificate, memorandum and articles of association, board resolutions, business plan, KYC documents of directors, proof of office address, and other relevant documents as specified by the NHB.
Inspection: The NHB may conduct an inspection of the applicant's office premises to assess its suitability for conducting housing finance activities.
Grant of Certificate of Registration: Upon satisfactory fulfillment of all requirements and successful completion of the evaluation process, the NHB will grant the Certificate of Registration to operate as a housing finance company.
Compliance and Reporting: After obtaining the registration, the housing finance company is required to comply with the terms and conditions specified by the NHB. This includes reporting requirements, maintenance of records, and adherence to the housing finance regulations.