India being a land of increasing opportunities and resources is now on the path of promoting entrepreneurship. The Government is constantly encouraging the citizens to change their approach from being job seekers to job givers. Major challenge on this arena lies in the availability of capital. In order to facilitate the same policies (such as ‘StartUp India’ ‘StandUp India’) have been introduced. The Government is also encouraging more entities to enter into the domain of financing so as to increase the business productivity in the country.
Non-Banking Finance Companies
A non-banking financial company (hereinafter referred to as “NBFC”) which is a company registered under the Companies Act, 2013, and governed as per the provisions of the Reserve Bank of India Act, 1934 (hereinafter referred to as the “Act”), aims towards financing, whether by way of making loans or advances or otherwise, of any activity.
Pre-requisites for NBFC
No NBFC shall commence or carry on its business without
- obtaining a certificate of registration issued in accordance to the Act; and
- having the net owned fund of INR 2,500,000 (USD 34730 approx.) or such other amount.
PayU… the new NBFC
The increasing digitalization has transformed the business methodology allowing the transactions to be conducted through the online medium. Payment on the virtual world permits the purchase of goods and services without the requirement of physical media. One of such payment gateway is PayU which helps the e-retailers to accept and process payments through payment methods that can be integrated with web and mobile applications.
Expanding the scope of its operations, PayU is now entering the domain of financing. After receiving the approval for license from the Reserve Bank of India, PayU Credit shall be conducting non-banking financial services. PayU aims to serve needs of the large financially unserved population of the country.
With a view to meet the needs of the aspirational entrepreneurial sector of the nation, the Government has been taking steps to ease the process of sponsoring them the requisite credit. Sanctioning and making available more options of financial support, the Government helps to reinforce the business structures of the business entities in India.