Is this legal as non nbfc
9 months ago
Example :my customer borrowed 5k
Interest: 39%(1950) , processing fee4%(200). Total 7150 / months (3or 6) emi = 2383/ 3 months
my company is startup., so it's not a nbfc yet? Am I subject any restrictions?? Is this legal?
A.Dear Client,
In the absence of a license issued to NBFC by the Regulatory Authority, RBI, trading or marketing of financial business or transactions is termed as illegal and unfair trade practice and the trader or businessman may be prosecuted under the Prevention of Money-Laundering Act, 2002. The following types of entities that are involved in the principal business of financial activity do NOT require NBFC License: Housing Finance Companies – Regulated by the National Housing Bank; Insurance Companies – Regulated by the Insurance Regulatory and Development Authority of India (IRDA). Application for NBFC License may be submitted online and offline with the necessary documents to the Regional Office of the Reserve Bank of India. The documents that need to be submitted for NBFC License are Certified copies of the Certificate of Incorporation and Certificate of Commencement of Business in case of public limited companies along with other documents which may be required by the regulatory authority.
In the absence of a license issued to NBFC by the Regulatory Authority, RBI, trading or marketing of financial business or transactions is termed as illegal and unfair trade practice and the trader or businessman may be prosecuted under the Prevention of Money-Laundering Act, 2002. The following types of entities that are involved in the principal business of financial activity do NOT require NBFC License: Housing Finance Companies – Regulated by the National Housing Bank; Insurance Companies – Regulated by the Insurance Regulatory and Development Authority of India (IRDA). Application for NBFC License may be submitted online and offline with the necessary documents to the Regional Office of the Reserve Bank of India. The documents that need to be submitted for NBFC License are Certified copies of the Certificate of Incorporation and Certificate of Commencement of Business in case of public limited companies along with other documents which may be required by the regulatory authority.
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A.Dear client,
This depends on each state's laws. The government is empowered to fix the maximum rate of interest for secured and unsecured loans. For instance Under the Karnataka Prohibition of Charging Exorbitant Interest Act 2004, no person can charge an interest of more than 18 per cent per annum. Any person who charges interest above this rate is liable for imprisonment for a term that may extend to three years and also a fine that may extend to Rs 30,000.
This depends on each state's laws. The government is empowered to fix the maximum rate of interest for secured and unsecured loans. For instance Under the Karnataka Prohibition of Charging Exorbitant Interest Act 2004, no person can charge an interest of more than 18 per cent per annum. Any person who charges interest above this rate is liable for imprisonment for a term that may extend to three years and also a fine that may extend to Rs 30,000.
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