NBFC Registration in India

NBFC Registration in India

Obtaining NBFC registration involves compliance with the Companies Act, 2013, and the RBI Act, 1934. Once licensed, an NBFC must adhere to circulars, guidelines, and notifications issued by the RBI.

How We Work:

  1. Customer Registration: Client information is entered into our database.
  2. Receive Payment: Payment is received from the client after order generation.
  3. Submit Documents: Required documents are collected from the client.

Overview on NBFC:

An NBFC, registered under the Companies Act, 2013, and regulated by the RBI, engages in offering loans, advances, and acquiring stock, equities, and debts. NBFCs play a vital role in fulfilling financial needs when banks fall short.

NBFC Registration:

Registration under the Companies Act, 2013, and the RBI Act, 1934, is essential for NBFCs. They facilitate financial functions in the economy and receive deposits under prescribed schemes. The RBI regulates their operations.

Benefits of NBFC Registration:

Benefits of NBFC Registration

1) Low Cost and Time: Compared to opening a bank, NBFC registration is considered easier and less time-consuming.

2) Easy Registration: With an experienced consultant, the process becomes smoother.

3) Industry Growth Ratio: NBFCs contribute to the rising Fintech industry, providing easy funding sources.

4) Easy Recovery of Loans: Systematic operations and smaller loan amounts ease the repayment process.

Pre-Conditions for NBFC Registration:

As per Section 45-IA of the RBI Act, 1934, the following conditions must be met:

  • Company registration under the Companies Act, 2013.
  • At least 1/3rd of directors with a minimum of 10 years of finance experience.
  • Detailed business plan ready for the next 5 years.
  • Minimum Net Owned Fund (NOF) of Rs. 2 Crore.
  • Clean credit history and compliance with FDI regulations.

Types of NBFCs:

  1. On the Basis of Liabilities:
  • Deposit-accepting NBFCs.
  • Non-deposit accepting NBFCs.

2. On the Basis of Activities:

  • Investment and Credit Company.
  • Infrastructure Finance Company.
  • Systemically Important Core Investment Company.
  • Others.

Distinguishing NBFCs from Banks:

Points of Differentiation

AspectNon-Banking Financial Corporation (NBFC)Banks
Act of RegulationsCompanies Act, 2013Banking Regulation Act, 1949
Demand DepositsCannot accept demand depositsCan accept demand deposits
Drawing of a ChequeCannot draw cheques on its ownCan issue or draw cheques
Deposit Insurance FacilityThe facility is not available with NBFC depositors | Available for the bankersThe Facility is available for the Bankers
Asset RestructuringAllowedNot Allowed
Maintenance of Reserve RatiosNo CompulsoryCompulsory to Maintain Reserve Ratio
Loan SanctionEasier and FasterComparatively Stringent
Product OfferingMajor Property LoansAll types of Loans
Foreign Direct Investment (FDI)Permitted up to a Specified LimitNot Allowed
SLR (Statutory Reserve Ratio)Only a deposit-taking NBFC needs to maintain 15% SLRMandatory to Maintain SLR (100% allowed)

Role and Function of NBFC in India:

  • Development of sectors like infrastructure.
  • Wealth creation and substantial employment generation.
  • Providing finance to the economically weaker sections.
  • Contributing to economic development and the state exchequer.
  • Facilitating long-term audit and specialized credit.

Powers of RBI on NBFCs:

RBI monitors NBFC registration, lays down policies, issues guidelines, supervises compliance, and imposes penalties for violations.

RBI Compliance for NBFC:

  • Adoption of Fair Practice Code.
  • Secretarial compliances.
  • CIC registration.
  • C-KYC registration.
  • COSMOS registration.
  • CERSAI registration.
  • FIU-IND registration.
  • File NBS-9 on COSMOS.
  • Compliance with KYC and anti-money laundering regulations.
Business Success This Way



Ans: NBFC stands for Non-Banking Financial Company, registered under the Companies Act, 2013, engaged in financial activities without a full-fledged banking license.
Ans: Requirements include registration under the Companies Act, 2013, directors’ qualifications, a unique business plan, a minimum Net Owned Fund, a clean credit history, and compliance with FDI regulations.
Ans: NBFCs and banks differ in regulation, acceptance of demand deposits, drawing cheques, and deposit insurance facility.
Ans: Required documents include incorporation certificate, management information, PAN card, address documents, MOA, AOA, directors’ list, credit reports, board resolutions, and various financial statements.
Ans: No, various financial entities like Nidhi companies, housing finance companies, and insurance companies are governed by different regulators.
Ans: RBI has powers to regulate policies, registration, inspection, issue guidelines, and impose penalties for non-compliance with the RBI Act, 1934.
Ans: Public funds include public deposits, bank finance, inter-corporate deposits, and funds received directly or indirectly from outside sources.
Ans: Post-registration compliances include statutory audit, income tax returns filing, GST returns filing, ROC returns, tax audit, and other prescribed compliances.
Ans: Presently, the maximum interest rate an NBFC can offer is 12.5%.
Ans: NBFCs can accept or renew public deposits for a minimum of 12 months and a maximum of 60 months. They cannot accept deposits repayable on demand.
The Force Behind the Premier Brok

1) Curious about NBFC Registration Turnaround?
Ans: The registration process typically spans 90-120 days.

2) Debating Forming a Fresh NBFC or Acquiring an Existing One?
Ans: Make this decision based on your business objectives. Consult our advisor for guidance.

3) Understanding Deposit and Non-Deposit Taking NBFCs
Ans: Deposit NBFCs can accept deposits from the public, while Non-Deposit NBFCs cannot.

4) Unveiling the Concept of Microfinance
Ans: Microfinance, a distinctive type of NBFC, addresses the micro-lending needs of both urban and economically disadvantaged sectors at reasonable rates.

Leave a Comment