Growing Your Fintech Startup Through NBFC Licence

Introduction
Fintech startups are those innovative businesses which seek to revolutionise the usage of money in today’s digital world by providing digital solutions, software, platforms etc. Whether you’re involved in a fintech startup or an existing enterprise, understanding the process of NBFC registration online is crucial for regulatory compliance. Recently too many fintech startups have been born in India and many of them have even become unicorns such as Paytm, Cred, PhonePay, Razorpay, BharatPay, OneCard etc.

NBFC stands for Non-Banking Financial Corporation, which are financial institutions which seek to provide ancillary banking services. They are not an alternative to conventional banking systems but instead support them. The major difference between NBFC and Banks is as follows:

Banks offer wide-ranging banking services whereas NBFCs majorly engage in lending and investment activities.
Banks can accept public deposits but NBFCs can not. Moreover, they can not even accept cheques.
Banks require a banking licence from RBI whereas NBFCs require a NBFC licence, usually obtained through an online registration process. However, both are regulated by RBI.
Banks are regulated by the Banking Regulation Act, of 1949 whereas an NBFC is incorporated as a company under the Companies Act, of 1956 /2013.
From the above discussion, it becomes evident that fintech startups and NBFCs have nothing in common except the fact that they both provide financial services. Recently the co-founder of BharatPay in his interview with the Economic Times said “It is fundamentally clear that there is no money in payments. The core business model is lending.