Guidelines

How can I start a small money lending business in India?

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How can I start a small money lending business in India?

To start your Finance Company as a Section 8 Company, the minimum number of Directors is 2, in India.

  1. Obtain their DSC and DIN.
  2. Choose and get the Name approved from the ROC.
  3. Apply for a License to do the social work in India, from the Central Government.
  4. On receipt of License approval, apply for Incorporation.

Do I need a license to lend money in India?

In India, money lenders are governed by the Money Lenders Act in different states. It is mandatory for every money lender to have a license.

Is money lending legal in India?

P2P lending is a completely legal process with various regulated by the RBI – ensuring protection of interests of both – borrowers and lenders. It is done via various online organizations.

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Is money lending profitable?

While the role of moneylenders has reduced, they still continue to play a prominent role in the system. They continue to charge high rates of interest, which in turn leads to super normal profits. Money lending, hence has always been and will be one of the most lucrative business.

How do I start a finance firm?

Start a financial planning firm by following these 10 steps:

  1. STEP 1: Plan your business.
  2. STEP 2: Form a legal entity.
  3. STEP 3: Register for taxes.
  4. STEP 4: Open a business bank account & credit card.
  5. STEP 5: Set up business accounting.
  6. STEP 6: Obtain necessary permits and licenses.
  7. STEP 7: Get business insurance.

Is it legal to lend money with interest?

Interest-free loans are non-taxable for both lenders and borrowers. However, it becomes complicated in case there is a provision for payment of interest, as the lender will have to pay tax on the interest earned. But then, unlike a friend, a bank will never lend you without interest or at a discount.

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What is illegal interest rate in India?

As per money lending act, interest on loans cannot be charged exorbitantly. The normal interest that shall be chargeable shall restrict to 24\% pa.

Can I do money lending business without NBFC license?

5.So unless and until you form NBFC you can do money lending business. In case of Company desirous of doing finance business, must mandatory take License (Certificate) from Reserve Bank of India u/s 45 of the RBI Act.

What is money lending in India?

Money lending in India is an ancient practice that has now become structured and secure. Compared to the older times, it is also more convenient. Let’s walk through how the practice has evolved over time. This business can be traced back to the Vedic periods.

Do I need a license to start a money lending business?

You need to take money lending licence. In case the capital is huge make it as a company. You can’t from a partnership. You shall be governed by the BOMBAY MONEY LENDERS ACT, 1946 and other applicable laws if you go for incorporation into company.

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How do I get a money lending license in Maharashtra?

However, apart from above, a further “money lending licence” is to be obtained from “each & every” State, where money lending business is proposed to be conducted. In Maharashtra, the dept of Cooperatives is entrusted for granting of such “money lending licence”.

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