Saving Mantra Blogs

Author: Financial Analyst

  • Apply for 35AC in India: Step-by-Step Guide

    Section 35AC of the Income Tax Act was a special provision that allowed donors to claim 100% tax deduction on donations made to approved social and economic welfare projects. Approval under Section 35AC was granted by the National Committee for Promotion of Social and Economic Welfare (NCPSEW) under the Central Government.
    In this Saving Mantra guide, we explain what 35AC is, its purpose, and the step-by-step process to apply for 35AC in India, along with eligibility, documents, and important compliance notes.

    What is Section 35AC?

    Section 35AC provided tax incentives to encourage funding of projects related to:

    • Poverty alleviation
    • Education and skill development
    • Healthcare and sanitation
    • Rural development
    • Social and economic welfare

    Donations made to approved institutions/projects were eligible for 100% deduction for donors.

    Important Update on Section 35AC

    ⚠️ Key Note:
    Section 35AC benefits were withdrawn by the Government of India with effect from Assessment Year 2018–19 onwards.

    • New approvals under Section 35AC are no longer granted
    • Existing approvals were valid only up to their approved period

    However, understanding 35AC remains relevant for legacy compliance, audits, and historical tax matters, and for institutions transitioning to other benefit sections like 80G.

    Who Was Eligible to Apply for 35AC Approval?

    Earlier, the following entities could apply:

    • Registered Trusts
    • Registered Societies
    • Section 8 Companies
    • Institutions engaged in approved welfare activities

    Conditions included:

    • Non-profit motive
    • Proper registration and governance
    • Transparent accounting and audits

    Benefits of 35AC Approval (Earlier)

    For Donors

    • 100% tax deduction on donation amount
    • No maximum limit on deduction

    For Institutions

    • Increased donor confidence
    • Access to large corporate and institutional funding
    • Government-recognized welfare status

    Step-by-Step Process to Apply for 35AC in India (Earlier Process)

    Step 1: Legal Registration of Entity

    The applicant had to be a registered Trust, Society, or Section 8 Company.

    Step 2: Prepare Welfare Project Proposal

    A detailed project report was prepared covering:

    • Objectives and social impact
    • Area of operation
    • Budget and funding requirement
    • Implementation timeline

    Step 3: Compile Required Documents

    All statutory, financial, and project-related documents were prepared.

    Step 4: Application to National Committee

    Application was submitted to the National Committee for Promotion of Social and Economic Welfare, Ministry of Finance.

    Step 5: Scrutiny & Evaluation

    The committee evaluated:

    • Genuineness of activities
    • Social impact of the project
    • Financial transparency and governance

    Step 6: Grant of 35AC Approval

    Upon satisfaction, the project/institution was notified and published in the Official Gazette.

    Documents Required for 35AC Application (Earlier)

    • Registration certificate (Trust/Society/Section 8)
    • MOA/Trust Deed/Bye-laws
    • Audited financial statements
    • Detailed project report
    • PAN Card of institution
    • Activity reports and photographs
    • Board/Trustee resolution

    Post-Approval Compliance (Earlier)

    • Utilization of funds strictly for approved projects
    • Maintenance of separate books of accounts
    • Periodic reporting to authorities
    • Proper issuance of donation receipts

    Current Alternatives to Section 35AC

    Since 35AC is discontinued, NGOs now opt for:

    • Section 80G Registration (donor tax deduction)
    • 12A / 12AB Registration (income tax exemption)
    • CSR funding under Companies Act
    • Government and international grants

    Why Choose Saving Mantra for NGO & Tax Benefit Advisory?

    • Expert guidance on legacy 35AC matters
    • Assistance with 12A & 80G registrations
    • NGO structuring and compliance support
    • Transparent and professional advisory services

    Conclusion

    Section 35AC played a significant role in promoting social and economic welfare projects in India by incentivizing donors with full tax deduction. Although new 35AC approvals are no longer available, understanding its framework is important for historical compliance and for NGOs transitioning to current tax benefit provisions. Saving Mantra provides expert guidance on NGO registrations, tax exemptions, and compliant funding structures.

    Disclaimer

    The information provided in this blog is for general informational purposes only and does not constitute legal or tax advice. Section 35AC benefits have been withdrawn from Assessment Year 2018–19 onwards, and no new approvals are granted. Laws, rules, and tax provisions are subject to change. Readers are advised to consult qualified professionals for current and applicable tax benefit registrations in India.

  • Society Registration in India: Step-by-Step Guide

    Society Registration in India is the legal process of forming a non-profit organization to promote charitable, educational, cultural, religious, scientific, literary, or social welfare objectives. Registered societies gain legal recognition, credibility, and the ability to operate transparently across India.
    In this Saving Mantra guide, we explain what society registration is and provide a step-by-step process for Society Registration in India, including eligibility, documents, benefits, and compliance.

    What is a Society?

    A Society is an association of individuals united by a common purpose—typically non-profit in nature—registered under the Societies Registration Act, 1860 or relevant state amendments. Once registered, the society becomes a legal entity capable of owning property, opening bank accounts, and entering contracts in its own name.

    Objectives Suitable for Society Registration

    • Education and skill development
    • Medical relief and healthcare
    • Art, culture, and heritage promotion
    • Sports and recreation
    • Social welfare and community development
    • Environmental protection and research

    Who Can Form a Society?

    • Minimum 7 members (individuals) are required
    • Members can be Indian citizens; some states allow entities as members
    • Members must share a common, lawful objective

    Benefits of Society Registration

    • Legal recognition and structured governance
    • Ability to open bank accounts and receive grants/donations
    • Enhanced credibility with donors and authorities
    • Eligibility for tax benefits (subject to separate approvals)
    • Perpetual succession independent of members

    Step-by-Step Process for Society Registration in India

    Step 1: Choose a Unique Society Name

    Select a name that is unique, lawful, and not identical or deceptively similar to an existing registered society.

    Step 2: Form the Governing Body

    Appoint a Governing Body/Managing Committee (e.g., President, Secretary, Treasurer) as per state rules.

    Step 3: Draft the Memorandum of Association (MOA)

    The MOA should include:

    • Name and address of the society
    • Objectives and area of operation
    • Details of founding members
    • Rules for membership and management

    Step 4: Draft the Rules & Regulations

    Prepare the Rules & Regulations/Bye-laws covering meetings, elections, accounts, audits, and dissolution.

    Step 5: Prepare Supporting Documents

    Collect KYC and address proofs of members, along with office address proof.

    Step 6: File Application with Registrar of Societies

    Submit the application to the Registrar of Societies of the concerned state with MOA, Rules, affidavits, and fees.

    Step 7: Verification by Registrar

    The Registrar scrutinizes documents and may seek clarifications or corrections.

    Step 8: Issue of Society Registration Certificate

    Upon approval, the Society Registration Certificate is issued, and the society becomes legally registered.

    Documents Required for Society Registration

    • Memorandum of Association (MOA)
    • Rules & Regulations/Bye-laws
    • List of founding members with signatures
    • Identity & address proof of members
    • Registered office address proof
    • Affidavits/declarations (state-specific)

    (Requirements may vary by state)

    Time Required for Society Registration

    • Typically 15 to 30 working days, depending on state procedures and document accuracy.

    Post-Registration Compliance

    • Open society bank account
    • Maintain books of accounts
    • Conduct meetings as per bye-laws
    • File annual returns (state-specific)
    • Apply for PAN and tax registrations if required
    • Apply for 12A/80G (optional, for tax benefits)

    Society vs Trust vs Section 8 Company (Quick View)

    ParameterSocietyTrustSection 8 Company
    Governing LawSocieties ActTrust ActCompanies Act
    Members RequiredMin. 7Min. 2 TrusteesMin. 2 Directors
    ComplianceMediumLowHigh
    Best ForAssociations/NGOsCharitable trustsLarge NGOs

    Why Choose Saving Mantra for Society Registration?

    • State-wise registration expertise
    • Accurate drafting of MOA & Rules
    • Transparent and affordable pricing
    • Quick processing and follow-ups
    • End-to-end NGO compliance support

    Conclusion

    Society Registration in India is ideal for groups aiming to work collectively for public or community welfare. By following the correct step-by-step society registration process, you can establish a compliant, credible, and sustainable organization. Saving Mantra ensures a smooth, professional, and hassle-free Society Registration experience across India.

    Disclaimer

    The information provided in this blog is for general informational purposes only and does not constitute legal, tax, or professional advice. Society registration laws, documentation, and procedures vary by state and may change from time to time. Readers are advised to consult qualified professionals before proceeding with Society Registration in India.

  • Trust Registration in India: Step-by-Step Guide

    Trust Registration in India is the legal process of creating a charitable or private trust to manage assets or carry out activities for public welfare, education, healthcare, religion, or family purposes. A registered trust gains legal recognition, credibility, and eligibility for tax benefits.
    In this Saving Mantra guide, we explain what a trust is and provide a step-by-step process for Trust Registration in India, including eligibility, documents, benefits, and post-registration compliance.

    What is a Trust?

    A Trust is a legal arrangement where the settlor transfers property or assets to trustees, who hold and manage them for the benefit of beneficiaries or for charitable objectives. Trusts in India are governed mainly by the Indian Trusts Act, 1882 (for private trusts) and relevant state laws (for public charitable trusts).

    Types of Trusts in India

    1. Public Charitable Trust

    Formed for charitable purposes such as education, medical relief, poverty alleviation, or public welfare.

    2. Private Trust

    Formed for the benefit of specific individuals or families.

    Who Can Form a Trust?

    • Any Indian citizen or group of persons
    • Minimum two trustees are required
    • Trust can be formed with or without property (for charitable purposes)

    Benefits of Trust Registration

    • Legal recognition and credibility
    • Eligibility for tax exemptions (12A, 80G – subject to approval)
    • Ability to open bank accounts and receive donations
    • Transparency and structured governance
    • Long-term continuity and asset protection

    Step-by-Step Process for Trust Registration in India

    Step 1: Decide the Trust Name

    Choose a unique name that does not infringe existing registered trusts or trademarks.

    Step 2: Identify Settlor and Trustees

    Appoint the settlor (creator of trust) and at least two trustees who will manage the trust.

    Step 3: Draft the Trust Deed

    Prepare the Trust Deed, which is the main legal document defining:

    • Name and address of the trust
    • Objectives of the trust
    • Details of trustees and settlor
    • Trust property and management rules
    • Powers, duties, and tenure of trustees

    Step 4: Stamp the Trust Deed

    Pay the applicable stamp duty on the trust deed as per state stamp laws.

    Step 5: Register the Trust Deed

    Submit the trust deed to the Sub-Registrar of Assurances for registration along with required documents.

    Step 6: Obtain Trust Registration Certificate

    After verification, the trust deed is registered and the Trust Registration Certificate is issued.

    Documents Required for Trust Registration

    • Trust Deed (on stamp paper)
    • PAN Card of settlor and trustees
    • Identity & address proof of trustees
    • Passport-size photographs
    • Address proof of registered office
    • NOC from property owner (if applicable)

    (Document requirements may vary by state)

    Time Required for Trust Registration

    • Generally 7 to 15 working days, depending on state and documentation accuracy.

    Post Trust Registration Compliance

    • Apply for PAN Card of trust
    • Open trust bank account
    • Maintain books of accounts
    • File income tax returns
    • Apply for 12A and 80G (optional, for tax benefits)
    • Conduct meetings as per trust deed

    Difference Between Trust, Society & Section 8 Company

    BasisTrustSocietySection 8 Company
    Governing LawTrust ActSocieties ActCompanies Act
    Registration AuthoritySub-RegistrarRegistrar of SocietiesROC
    ComplianceLowMediumHigh
    Ideal ForCharitable & family trustsAssociationsLarge NGOs

    Why Choose Saving Mantra for Trust Registration?

    • Expert drafting of trust deed
    • State-wise registration guidance
    • Transparent and affordable pricing
    • Quick and compliant registration
    • End-to-end NGO and trust compliance support

    Conclusion

    Trust Registration in India is a foundational step for individuals and groups aiming to create a legally recognized structure for charitable or private purposes. By following the correct step-by-step trust registration process, you can ensure transparency, legal compliance, and long-term sustainability. Saving Mantra provides a smooth, professional, and hassle-free Trust Registration service across India.

    Disclaimer

    The information provided in this blog is for general informational purposes only and does not constitute legal, tax, or professional advice. Trust laws, stamp duty, and registration procedures vary by state and are subject to change. Readers are advised to consult qualified professionals before proceeding with Trust Registration in India.

  • Eating House License Registration in India

    Eating House License Registration in India is a mandatory approval for businesses involved in preparing, serving, or selling food and beverages to the public. This license is typically issued by the local police authority and is required in addition to other food-related registrations.
    In this Saving Mantra guide, we explain what an Eating House License is and provide a step-by-step process for Eating House License Registration in India, including eligibility, documents, timelines, and compliance.

    What is an Eating House License?

    An Eating House License is a statutory permission required for establishments such as restaurants, cafes, eateries, hotels, food courts, and refreshment houses where food or drinks are supplied for consumption. The license ensures public safety, hygiene, and law & order compliance.

    Who Needs an Eating House License?

    The license is mandatory for:

    • Restaurants and cafes
    • Hotels serving food
    • Food courts and canteens
    • Bars and pubs (in addition to liquor license)
    • Cloud kitchens with dine-in or public access

    Benefits of Eating House License Registration

    • Legal authorization to operate a food establishment
    • Compliance with local police and municipal laws
    • Avoidance of penalties and closure notices
    • Builds customer trust and business credibility
    • Mandatory for renewal of other trade licenses in many states

    Step-by-Step Process for Eating House License Registration in India

    Step 1: Register the Business Entity

    Register your business as a Proprietorship, Partnership, LLP, or Private Limited Company.

    Step 2: Obtain Mandatory Pre-Licenses

    Before applying, ensure you have:

    • FSSAI Registration/License
    • Shop Act / Trade License (as applicable)
    • Fire Safety NOC (where required)

    Step 3: Prepare Required Documents

    Collect all documents related to the business, premises, and promoters.

    Step 4: File Application with Local Police Authority

    Submit the Eating House License application to the jurisdictional police department (online or offline, state-specific).

    Step 5: Police Verification & Inspection

    Police authorities may conduct:

    • Background verification of owners
    • Physical inspection of premises
    • Verification of safety and hygiene measures

    Step 6: Pay Government Fees

    Pay the prescribed license fee, which varies by state/city and seating capacity.

    Step 7: Grant of Eating House License

    Upon successful verification, the Eating House License is issued, allowing lawful operation.

    Documents Required for Eating House License

    • Identity & address proof of proprietor/partners/directors
    • Business registration certificate
    • FSSAI License
    • Shop Act / Trade License
    • Proof of premises ownership/lease
    • Site plan and seating layout
    • Fire Safety NOC (if applicable)
    • Affidavit and declarations

    (Document requirements vary by state and city)

    Validity & Renewal of Eating House License

    • License validity is generally 1 year
    • Renewal must be applied before expiry to continue operations

    Post-License Compliance

    • Adherence to hygiene and safety norms
    • Display of license at premises
    • Timely renewal and updates
    • Cooperation during inspections
    • Compliance with local municipal rules

    Penalty for Non-Compliance

    Operating without an Eating House License may lead to:

    • Heavy fines
    • Sealing of premises
    • Suspension of food business
    • Legal action by local authorities

    Why Choose Saving Mantra for Eating House License Registration?

    • City and state-wise licensing expertise
    • Accurate documentation and police coordination
    • Transparent and affordable pricing
    • Fast processing and follow-ups
    • End-to-end food business compliance support

    Conclusion

    Eating House License Registration in India is a critical legal requirement for running any public food-serving establishment. By following the correct step-by-step Eating House License registration process, businesses can operate smoothly, legally, and without disruption. Saving Mantra ensures a hassle-free, compliant, and professional Eating House License registration experience across India.

    Disclaimer

    The information provided in this blog is for general informational purposes only and does not constitute legal or professional advice. Eating House License rules, fees, and procedures vary by state and local authority and are subject to change. Readers are advised to consult qualified professionals before applying for an Eating House License or commencing food business operations.

  • RERA Agent Registration & Complaint Filing Guide

    RERA Registration for Real Estate Agents and RERA Complaint Filing are two crucial compliances under the Real Estate (Regulation and Development) Act, 2016. While agent registration allows brokers to legally facilitate property transactions, RERA complaint filing empowers buyers and agents to seek justice against unfair practices.
    In this Saving Mantra guide, we explain RERA registration for agents and the step-by-step process to file a RERA complaint in India, ensuring full legal compliance and protection.

    What is RERA Agent Registration?

    RERA Agent Registration is mandatory for real estate brokers or agents who facilitate sale, purchase, or lease of properties in RERA-registered projects. Without registration, agents cannot legally advertise, market, or sell properties.

    Registration is granted by the State RERA Authority where the agent operates.

    Who Needs RERA Registration as an Agent?

    • Property brokers and real estate agents
    • Channel partners of builders
    • Consultants involved in sale or purchase of RERA projects
    • Firms or companies providing real estate brokerage services

    Benefits of RERA Registration for Agents

    • Legal authority to operate as real estate agent
    • Increased credibility with buyers and developers
    • Protection from penalties and blacklisting
    • Transparency and standardized practices
    • Ability to operate across registered RERA projects

    Step-by-Step Process for RERA Agent Registration in India

    Step 1: Identify State RERA Authority

    RERA registration is state-specific. Apply in the state where the agent conducts business.

    Step 2: Create Login on State RERA Portal

    Register on the official State RERA website using email ID and mobile number.

    Step 3: Fill Agent Registration Application

    Provide details such as:

    • Name and constitution of agent
    • Office address and contact details
    • Experience and business details
    • PAN and Aadhaar details

    Step 4: Upload Required Documents

    Upload all mandatory documents in the prescribed format.

    Step 5: Pay RERA Registration Fees

    Pay the applicable RERA agent registration fee (varies by state).

    Step 6: Verification by RERA Authority

    The authority verifies the application and documents. Clarifications may be requested.

    Step 7: Issue of RERA Agent Registration Certificate

    Upon approval, the RERA Agent Registration Certificate and registration number are issued.

    Documents Required for RERA Agent Registration

    • PAN Card
    • Aadhaar Card
    • Address proof of office
    • Photograph
    • Business registration proof (if applicable)
    • Income tax return (some states)

    Validity of RERA Agent Registration

    • Generally valid for 5 years (varies by state)
    • Renewal must be applied before expiry

    What is RERA Complaint Filing?

    RERA Complaint Filing is a legal remedy available to homebuyers, allottees, or agents to report violations by builders, promoters, or other stakeholders before the RERA Authority or RERA Adjudicating Officer.

    Grounds for Filing a RERA Complaint

    • Delay in possession
    • False promises or misleading advertisements
    • Violation of agreement for sale
    • Non-registration of project or agent
    • Poor construction quality
    • Unfair trade practices

    Step-by-Step Process for RERA Complaint Filing in India

    Step 1: Identify Correct RERA Authority

    File the complaint with the RERA authority of the state where the project is located.

    Step 2: Register on RERA Portal

    Create a complainant account on the respective State RERA website.

    Step 3: Fill RERA Complaint Form

    Provide details such as:

    • Complainant information
    • Project and promoter details
    • Nature of grievance
    • Relief sought (refund, interest, compensation, possession)

    Step 4: Upload Supporting Documents

    Attach agreement, payment receipts, correspondence, and other proofs.

    Step 5: Pay RERA Complaint Fees

    Pay the prescribed complaint filing fee, which varies by state.

    Step 6: Hearing and Proceedings

    RERA issues notice to the opposite party and conducts hearings.

    Step 7: RERA Order

    RERA passes an order directing refund, interest, compensation, or compliance.

    Benefits of RERA Complaint Filing

    • Faster resolution than civil courts
    • Transparency and accountability
    • Refund or interest for delay
    • Penalties on defaulting promoters or agents

    Why Choose Saving Mantra for RERA Services?

    • State-wise RERA expertise
    • Accurate agent registration and renewals
    • Professional drafting and filing of RERA complaints
    • Transparent and affordable pricing
    • End-to-end RERA compliance support

    Conclusion

    RERA Agent Registration ensures lawful and transparent real estate brokerage, while RERA Complaint Filing protects the rights of buyers and agents against malpractice. By following the correct step-by-step RERA processes, stakeholders can operate confidently and seek timely justice. Saving Mantra provides reliable, professional, and compliant RERA registration and complaint filing services across India.

    Disclaimer

    The information provided in this blog is for general informational purposes only and does not constitute legal advice. RERA rules, fees, and procedures vary by state and may change from time to time. Readers are advised to consult qualified professionals before applying for RERA registration or filing a RERA complaint.

  • Payment Aggregator License in India: Step-by-Step

    Payment Aggregator (PA) License in India is mandatory for entities that facilitate online payments by collecting funds from customers and settling them to merchants. The license is regulated by the Reserve Bank of India (RBI) to ensure secure, transparent, and compliant digital payment operations.
    In this Saving Mantra guide, we explain what a Payment Aggregator is and provide a step-by-step process for obtaining a Payment Aggregator License in India, including eligibility, capital norms, documentation, and post-licensing compliance.

    What is a Payment Aggregator?

    A Payment Aggregator is an entity that enables merchants to accept payments from customers using multiple payment instruments such as:

    • Credit cards and debit cards
    • UPI
    • Net banking
    • Wallets

    Payment Aggregators pool customer payments and transfer them to merchants after settlement, unlike Payment Gateways which only provide technical infrastructure.

    Who Needs a Payment Aggregator License?

    Entities that:

    • Onboard merchants and handle customer funds
    • Offer checkout and settlement services
    • Provide integrated payment solutions to e-commerce platforms
      must obtain a Payment Aggregator License from RBI.

    Benefits of Payment Aggregator License

    • Legal authority to operate payment aggregation business
    • Enhanced trust among merchants and customers
    • RBI-regulated credibility
    • Access to banking and card networks
    • Long-term scalability in digital payments ecosystem

    Eligibility Criteria for Payment Aggregator License

    As per RBI guidelines, an applicant must:

    • Be incorporated as a Company under Companies Act, 2013
    • Have minimum net worth of ₹15 crore at application stage
    • Increase net worth to ₹25 crore within 3 years
    • Have fit and proper promoters and directors
    • Maintain robust IT, data security, and risk management systems

    Step-by-Step Process for Payment Aggregator License in India

    Step 1: Company Incorporation

    Incorporate a Private Limited or Public Limited Company with payment services as its main object.

    Step 2: Arrange Minimum Net Worth

    Infuse the required net worth (₹15 crore) and obtain a CA-certified net worth certificate.

    Step 3: Prepare RBI-Compliant Policies

    Draft mandatory policies such as:

    • Information security policy
    • Risk management framework
    • AML & KYC policy
    • Merchant onboarding and dispute resolution policy

    Step 4: Prepare Business Plan

    Create a detailed 3–5 year business plan covering revenue model, technology architecture, settlement mechanism, and scalability.

    Step 5: Submit Application to RBI

    File the Payment Aggregator application with RBI along with all supporting documents and declarations.

    Step 6: RBI Due Diligence & Clarifications

    RBI scrutinizes promoter background, financial soundness, IT systems, and compliance readiness. Clarifications may be sought.

    Step 7: In-Principle Approval

    RBI grants in-principle approval, subject to fulfillment of specific conditions within a defined timeline.

    Step 8: Operational Readiness

    Set up escrow accounts, IT audits, merchant agreements, and internal controls as per RBI directions.

    Step 9: Final Payment Aggregator License

    After satisfactory compliance, RBI issues the final Payment Aggregator License, allowing commencement of operations.

    Documents Required for Payment Aggregator License

    • Certificate of Incorporation
    • MOA & AOA
    • Audited financial statements
    • Net worth certificate
    • Director and shareholder KYC
    • Business plan and financial projections
    • IT system architecture and audit reports
    • Board resolutions and declarations

    Timeline for Payment Aggregator License

    • Typically 6 to 12 months, depending on RBI scrutiny and readiness level.

    Post-License Compliance

    • Maintenance of minimum net worth
    • Escrow account management
    • Periodic RBI reporting
    • System audits and cybersecurity compliance
    • Consumer grievance redressal mechanism

    Penalty for Operating Without License

    Operating as a Payment Aggregator without RBI authorization may result in:

    • Heavy monetary penalties
    • Suspension of operations
    • Legal action under RBI Act and payment regulations

    Why Choose Saving Mantra for Payment Aggregator License?

    • RBI-focused fintech regulatory expertise
    • End-to-end license application support
    • Accurate documentation and policy drafting
    • Liaison with RBI and compliance readiness
    • Transparent and professional execution

    Conclusion

    Payment Aggregator License in India is a critical regulatory requirement for fintech and payment companies handling customer funds. By following the correct step-by-step Payment Aggregator licensing process, businesses can build a compliant, secure, and scalable payment platform. Saving Mantra ensures expert guidance at every stage of the Payment Aggregator License journey.

    Disclaimer

    The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or regulatory advice. RBI guidelines, net worth requirements, and licensing conditions may change from time to time. Readers are advised to consult qualified professionals before applying for a Payment Aggregator License in India.

  • What is MTSS? Money Transfer Service Scheme India

    MTSS (Money Transfer Service Scheme) is a regulated framework that allows quick and secure inward remittance of money into India from abroad. Introduced and regulated by the Reserve Bank of India (RBI), MTSS is widely used by NRIs and overseas workers to send money to beneficiaries in India without opening a bank account.
    In this Saving Mantra guide, we explain what MTSS is, how it works, who can participate, and why it is important for India’s remittance ecosystem.

    What is MTSS (Money Transfer Service Scheme)?

    MTSS is a scheme under which overseas principals (foreign money transfer companies) partner with Indian agents to facilitate inward personal remittances into India. The scheme is strictly for personal and family maintenance purposes and not for trade or business transactions.

    Under MTSS, beneficiaries in India can receive money in cash or directly into a bank account, subject to RBI limits and KYC norms.

    Objective of MTSS

    The main objectives of MTSS are to:

    • Enable fast and low-cost inward remittances
    • Support families dependent on overseas income
    • Provide a regulated and transparent money transfer mechanism
    • Prevent misuse of informal or illegal transfer channels

    Who Regulates MTSS in India?

    MTSS is regulated by the Reserve Bank of India (RBI) under FEMA (Foreign Exchange Management Act). RBI issues guidelines covering:

    • Appointment of Indian agents
    • Transaction limits
    • KYC and AML compliance
    • Reporting and audit requirements

    How MTSS Works – Simple Explanation

    1. Sender abroad approaches an overseas principal (money transfer company).
    2. The overseas principal sends transaction details to its Indian agent.
    3. The beneficiary in India visits the agent outlet with ID proof.
    4. Money is paid in cash or credited to the beneficiary’s bank account.

    Key Participants in MTSS

    1. Overseas Principal

    A foreign company approved by RBI to provide money transfer services to India.

    2. Indian Agent

    An Indian entity (bank or non-bank) appointed by the overseas principal and approved by RBI to disburse funds in India.

    3. Beneficiary

    The individual in India receiving the remittance for personal use.

    Eligibility to Act as MTSS Agent in India

    Entities eligible to become MTSS agents include:

    • Scheduled commercial banks
    • NBFCs approved by RBI
    • Companies registered under Companies Act
    • Entities with strong financials and compliance track record

    (RBI approval is mandatory)

    Transaction Limits Under MTSS

    As per RBI guidelines (subject to change):

    • Only inward remittances are allowed
    • Maximum amount per transaction is capped
    • Maximum number of transactions per beneficiary per year is limited
    • Remittances must be for personal purposes only

    Benefits of MTSS

    For Senders

    • Fast and convenient money transfer
    • Lower cost compared to informal channels
    • Secure and RBI-regulated mechanism

    For Beneficiaries

    • No need for bank account (for cash payout)
    • Quick access to funds
    • Transparency and consumer protection

    For Indian Agents

    • New revenue stream
    • Association with global remittance companies
    • Regulated and compliant business model

    MTSS vs Bank Remittance (SWIFT)

    ParticularsMTSSBank Remittance
    SpeedFasterSlower
    Bank AccountNot mandatoryMandatory
    PurposePersonal remittancePersonal & business
    RegulationRBI (MTSS)RBI & Banking norms

    Compliance Requirements Under MTSS

    • Strict KYC and AML compliance
    • Transaction reporting to RBI
    • Periodic audits and inspections
    • Record maintenance for prescribed period
    • Adherence to FEMA and RBI guidelines

    Penalty for MTSS Non-Compliance

    Violation of MTSS guidelines may result in:

    • Suspension or cancellation of RBI approval
    • Heavy monetary penalties
    • Legal action under FEMA

    Why Choose Saving Mantra for MTSS Advisory?

    • RBI-focused forex and remittance expertise
    • Guidance on MTSS approval and agent appointment
    • Compliance, documentation, and audit support
    • Transparent and professional advisory services

    Conclusion

    MTSS (Money Transfer Service Scheme) plays a crucial role in enabling safe, fast, and regulated inward remittances into India. It supports millions of families dependent on overseas income while ensuring compliance with RBI and FEMA norms. Understanding MTSS is essential for businesses, agents, and individuals involved in cross-border money transfers. Saving Mantra provides expert guidance on MTSS regulations, compliance, and implementation.

    Disclaimer

    The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or regulatory advice. MTSS guidelines, transaction limits, and eligibility criteria are subject to change as per RBI notifications. Readers are advised to consult qualified professionals before acting on MTSS-related matters.

  • Small Finance Bank License Registration in India

    Small Finance Bank (SFB) License Registration in India allows eligible entities to establish banks focused on financial inclusion, serving small businesses, MSMEs, farmers, and unbanked sections of society. The license is issued and regulated by the Reserve Bank of India (RBI) under its banking licensing framework.
    In this Saving Mantra guide, we explain what a Small Finance Bank is and the step-by-step process for obtaining a Small Finance Bank License in India, including eligibility, capital norms, documents, and post-licensing compliance.

    What is a Small Finance Bank?

    A Small Finance Bank is a niche banking institution set up to further financial inclusion by providing:

    • Savings and current accounts
    • Fixed and recurring deposits
    • Small-ticket loans to MSMEs, farmers, and low-income households

    SFBs can undertake basic banking activities but must prioritize lending to underserved sectors.

    Objectives of Small Finance Banks

    • Promote savings habits among rural and semi-urban populations
    • Provide credit to small business units and marginal farmers
    • Expand formal banking access
    • Support inclusive economic growth

    Eligibility Criteria for Small Finance Bank License

    An applicant must generally meet the following RBI criteria:

    • Existing NBFC, Microfinance Institution, or Local Area Bank with strong track record
    • Minimum paid-up equity capital of ₹200 crore
    • Promoters must be fit and proper
    • Sound financials and governance structure
    • Robust technology, risk management, and compliance framework

    Benefits of Small Finance Bank License

    • Authority to accept public deposits
    • Lower cost of funds compared to NBFCs
    • Wider product and customer reach
    • Strong RBI-regulated credibility
    • Long-term scalability in banking sector

    Step-by-Step Process for Small Finance Bank License Registration

    Step 1: Assess Eligibility & Readiness

    Evaluate capital adequacy, promoter background, governance standards, and financial inclusion focus as per RBI norms.

    Step 2: Choose Bank Structure

    Decide shareholding pattern, promoter contribution, and dilution plan in line with RBI guidelines.

    Step 3: Prepare Detailed Business Plan

    Draft a 5-year business plan covering:

    • Financial projections
    • Branch expansion strategy
    • Priority sector lending roadmap
    • Technology and cybersecurity framework

    Step 4: Draft Policies & Governance Framework

    Prepare key policies including:

    • Risk management & ICAAP
    • AML/KYC compliance
    • IT, data protection, and cybersecurity
    • Credit, recovery, and audit policies

    Step 5: Submit Application to RBI

    File the Small Finance Bank License application during RBI’s licensing window with all required documents.

    Step 6: RBI Due Diligence & Scrutiny

    RBI conducts in-depth scrutiny of promoters, capital, governance, compliance culture, and business viability.

    Step 7: In-Principle Approval

    RBI grants in-principle approval, subject to fulfillment of specified conditions within a defined period.

    Step 8: Set-Up & Operational Readiness

    Complete capital infusion, IT systems, HR hiring, branch setup, audits, and statutory registrations.

    Step 9: Final Banking License

    Upon satisfactory compliance, RBI issues the final Small Finance Bank License, allowing commencement of banking operations.

    Documents Required for Small Finance Bank License

    • Certificate of Incorporation
    • MOA & AOA
    • Audited financial statements
    • Net worth and capital certificates
    • Promoter and director KYC
    • Business plan and policy documents
    • Board resolutions and declarations

    Timeline for SFB License Registration

    • Typically 12 to 24 months or more, depending on RBI review cycles and readiness level.

    Post-License Compliance

    • Maintain CRR & SLR
    • Priority Sector Lending norms
    • Regular RBI reporting and inspections
    • Strong customer grievance redressal
    • Ongoing IT and cybersecurity compliance

    Key Challenges to Consider

    • High capital and compliance costs
    • Stringent RBI scrutiny
    • Long approval timelines
    • Governance and promoter dilution requirements

    Why Choose Saving Mantra for Small Finance Bank License?

    • RBI-focused banking regulatory expertise
    • Eligibility assessment and readiness advisory
    • End-to-end application drafting and liaison
    • Governance, policy, and compliance support
    • Transparent and professional execution

    Conclusion

    Small Finance Bank License Registration in India is a strategic opportunity for eligible institutions to enter the formal banking system and drive financial inclusion. By following the correct step-by-step Small Finance Bank licensing process, applicants can achieve RBI approval and build a compliant, scalable bank. Saving Mantra provides expert guidance at every stage of this complex journey.

    Disclaimer

    The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or regulatory advice. RBI eligibility norms, capital requirements, and licensing frameworks may change from time to time. Readers are advised to consult qualified professionals before applying for a Small Finance Bank License in India.

  • Conversion of NBFC into Bank in India: Guide

    Conversion of an NBFC into a Bank in India is a highly regulated pathway that allows a well-governed Non-Banking Financial Company to evolve into a Universal Bank or Small Finance Bank. The process is governed by the Reserve Bank of India (RBI) and involves stringent eligibility, capital, governance, and prudential norms.
    In this Saving Mantra guide, we explain what NBFC-to-Bank conversion means and provide a step-by-step process, including routes, documents, timelines, and post-approval compliance.

    What Does Conversion of NBFC into Bank Mean?

    It refers to obtaining a banking licence from RBI that permits an NBFC to accept deposits and offer the full suite of banking services. NBFCs cannot accept demand deposits; banks can—subject to RBI supervision.

    Routes Available for NBFC to Become a Bank

    1. Universal Bank Licence – Full-service commercial banking
    2. Small Finance Bank (SFB) – Focus on financial inclusion and priority sectors

    (RBI evaluates applications based on the applicable licensing framework at the time of application.)

    Key Eligibility Criteria (Indicative)

    • Minimum Net Worth: As prescribed by RBI for the chosen route (significantly higher for Universal Banks)
    • Track Record: Sound financials, compliance history, and governance
    • Fit & Proper Promoters/Directors
    • Capital Adequacy: As per RBI norms
    • Inclusion Focus: Especially for SFB route
    • Technology & Risk Frameworks: Robust IT, cybersecurity, AML/KYC

    Benefits of Converting NBFC into Bank

    • Ability to accept deposits (CASA)
    • Wider product suite and customer reach
    • Lower cost of funds over time
    • Enhanced credibility and systemic role
    • Long-term scalability

    Step-by-Step Process for Conversion of NBFC into Bank in India

    Step 1: Choose the Banking Route

    Decide between Universal Bank or Small Finance Bank based on business model, net worth, and inclusion goals.

    Step 2: Capital & Structure Readiness

    Meet prescribed net worth, streamline shareholding, and ensure promoter dilution plans where required.

    Step 3: Strengthen Governance & Policies

    Prepare board-approved policies:

    • Risk management & ICAAP
    • AML/KYC & compliance
    • IT, cybersecurity, and data protection
    • Credit, treasury, and recovery frameworks

    Step 4: Prepare the RBI Application

    Compile a comprehensive application including:

    • Detailed business plan (3–5 years)
    • Financial projections
    • Promoter background & fit-and-proper declarations
    • Technology and inclusion roadmap

    Step 5: Submit Application to RBI

    File the application as per the prevailing RBI licensing window/guidelines.

    Step 6: RBI Due Diligence

    RBI conducts rigorous scrutiny—financials, governance, ownership, compliance culture—and may seek clarifications.

    Step 7: In-Principle Approval

    RBI issues in-principle approval with conditions to be fulfilled within a stipulated time.

    Step 8: Set-Up & Transition

    Complete conditions: capital infusion, systems readiness, branch/network planning, HR, audits, and statutory registrations.

    Step 9: Final Banking Licence

    Upon satisfactory compliance, RBI grants the Banking Licence, enabling commencement of banking operations.

    Documents Typically Required

    • Corporate documents (COI, MOA/AOA)
    • Audited financial statements
    • Net worth certificates
    • Promoter/Director KYC
    • Business plan & policy manuals
    • Board resolutions and declarations

    Timeline

    • 12–24 months or more, depending on route, readiness, and RBI review cycles.

    Post-Licence Compliance (High-Level)

    • CRR/SLR maintenance
    • Priority Sector Lending
    • Ongoing RBI reporting & inspections
    • Enhanced consumer protection & grievance redressal
    • Continuous IT & cybersecurity compliance

    Risks & Considerations

    • High capital and compliance costs
    • Long approval timelines
    • Promoter dilution and governance expectations
    • Operational transformation challenges

    Why Choose Saving Mantra?

    • RBI-focused regulatory expertise
    • End-to-end readiness assessment
    • Application drafting & regulator liaison
    • Governance and policy framework support
    • Post-approval compliance handholding

    Conclusion

    Conversion of an NBFC into a Bank in India is complex but transformative. With strong capital, governance, and a compliant roadmap, eligible NBFCs can successfully transition into banking. Saving Mantra helps you navigate every step—strategically and compliantly.

    Disclaimer

    This content is for general informational purposes only and does not constitute legal, financial, or regulatory advice. RBI policies, eligibility norms, and licensing frameworks may change. Consult qualified professionals before initiating NBFC-to-Bank conversion.

  • Asset Reconstruction Company Registration India

    Asset Reconstruction Company (ARC) Registration in India allows entities to acquire and resolve Non-Performing Assets (NPAs) from banks and financial institutions. ARCs play a critical role in strengthening the financial system by recovering stressed assets and improving liquidity. ARCs are regulated by the Reserve Bank of India (RBI) under the SARFAESI Act, 2002.
    In this Saving Mantra guide, we explain what an ARC is and provide a step-by-step process for Asset Reconstruction Company Registration in India, including eligibility, capital requirements, documents, and ongoing compliance.

    What is an Asset Reconstruction Company (ARC)?

    An Asset Reconstruction Company is a specialized financial institution that purchases NPAs from banks and financial institutions and undertakes recovery or restructuring of such assets. ARCs help lenders clean up balance sheets and improve credit flow in the economy.

    Regulatory Framework for ARC Registration

    • SARFAESI Act, 2002
    • RBI Act, 1934
    • RBI guidelines and Master Directions applicable to ARCs

    Key Functions of an ARC

    • Acquisition of NPAs from banks/FIs
    • Reconstruction or restructuring of stressed assets
    • Enforcement of security interests
    • Issuance of Security Receipts (SRs) to Qualified Buyers
    • Resolution and recovery of bad loans

    Eligibility Criteria for ARC Registration

    To register an ARC in India, the applicant must:

    • Be incorporated as a Public Limited Company
    • Have minimum Net Owned Fund (NOF) of ₹300 crore
    • Promoters and directors must be fit and proper
    • Have a sound business plan and governance framework
    • Comply with RBI’s prudential and operational norms

    Benefits of ARC Registration

    • Legal authority to acquire and resolve NPAs
    • RBI-regulated credibility
    • Opportunity to participate in India’s stressed asset market
    • Access to institutional investors and Qualified Buyers
    • Contribution to financial system stability

    Step-by-Step Process for Asset Reconstruction Company Registration in India

    Step 1: Company Incorporation

    Incorporate a Public Limited Company under the Companies Act, 2013 with ARC as the main object.

    Step 2: Arrange Minimum Capital

    Infuse the required Net Owned Fund of ₹300 crore and obtain a CA-certified net worth certificate.

    Step 3: Prepare RBI Documentation

    Prepare a comprehensive application set including:

    • Detailed business plan
    • Asset acquisition and resolution strategy
    • Risk management and governance framework
    • KYC, AML, and compliance policies
    • Board resolutions

    Step 4: File Application with RBI

    Submit the ARC registration application to RBI along with all supporting documents.

    Step 5: RBI Due Diligence

    RBI conducts detailed scrutiny of promoters, capital adequacy, governance standards, and operational readiness. Clarifications may be sought.

    Step 6: Grant of Certificate of Registration

    Upon satisfaction, RBI issues the Certificate of Registration permitting the company to operate as an ARC.

    Step 7: Commencement of Operations

    After registration, the ARC can acquire NPAs, issue Security Receipts, and begin asset reconstruction activities.

    Documents Required for ARC Registration

    • Certificate of Incorporation
    • MOA & AOA
    • PAN Card of company
    • Net Owned Fund certificate
    • Audited financial statements
    • Director and promoter KYC
    • Detailed business plan and policies
    • Board resolutions

    Timeline for ARC Registration

    • ARC registration generally takes 9 to 12 months, depending on RBI scrutiny and document completeness.

    Post-Registration Compliance for ARCs

    • Maintain minimum capital adequacy
    • Periodic RBI returns and reporting
    • Compliance with SARFAESI and RBI norms
    • Statutory and internal audits
    • Disclosure and governance compliance

    Penalty for Operating Without ARC Registration

    Operating asset reconstruction activities without RBI registration may result in:

    • Heavy monetary penalties
    • Cancellation of business operations
    • Legal action under RBI and SARFAESI laws

    Why Choose Saving Mantra for ARC Registration?

    • RBI-focused expertise in stressed asset regulations
    • End-to-end ARC incorporation and licensing support
    • Accurate documentation and regulatory liaison
    • Transparent and affordable pricing
    • Ongoing compliance and advisory services

    Conclusion

    Asset Reconstruction Company Registration in India is a highly regulated but strategic opportunity to participate in the growing stressed asset resolution ecosystem. By following the correct step-by-step ARC registration process, promoters can obtain RBI approval and operate a compliant ARC. Saving Mantra ensures a smooth, professional, and regulation-ready Asset Reconstruction Company registration experience.

    Disclaimer

    The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or professional advice. ARC regulations, capital requirements, and RBI guidelines are subject to change. Readers are advised to consult qualified professionals before applying for Asset Reconstruction Company Registration in India or commencing ARC operations.