Tired of Navigating the Complex World of NBFC Compliance?
Keeping up with the myriad NBFC compliance requirements is overwhelming. Our team of seasoned professionals leverages extensive industry knowledge to ensure your NBFC accounting and compliance needs are met year-round—protecting your business from hefty penalties and operational disruptions.
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What NBFC Compliance Overview
A Non-Banking Financial Company (NBFC) is a financial institution offering banking-like services—such as loans, credit, asset financing, and wealth management—without being a bank or having a banking license. NBFCs bridge financial gaps, especially for underserved businesses and individuals. However, operating in this space demands adherence to the Reserve Bank of India’s (RBI) strict regulatory requirements.
Imagine this: You’re running your NBFC, focused on expanding your portfolio, building client relationships, and seizing growth opportunities. But every month, a new regulatory update lands on your desk. Compliance deadlines loom like storm clouds, and the fear of penalties or losing your license feels ever-present.
You’re not alone. Many NBFCs face the same challenge—balancing growth ambitions with the labyrinth of regulatory requirements. But what if you didn’t have to choose?
With the right strategies, managing compliance doesn’t have to come at the expense of growth. It can become the foundation that allows your NBFC to thrive, innovate, and stay ahead of the curve.
NBFC Advisory is here for YOU
Our team of seasoned professionals steps in as your NBFC compliance co-pilots, guiding you through every regulation and requirement with ease. With us by your side, you can leave the stress behind and focus on what you do best—driving your NBFC toward success.
Why Are NBFC Compliances Crucial?
Let’s be real—working out with endless NBFC RBI compliance is no small feat. From maintaining capital adequacy to filing a mountain of returns (like NBS-1, NBS-2, and more), it takes much more than expertise to run a business. But ignoring compliance risks isn’t an option.
Now, picture: a well-established NBFC is penalised due to missed filings. Its reputation takes a hit, clients lose trust, and operations come to a standstill. Now contrast that with an NBFC that adheres strictly to RBI guidelines—it attracts investors, retains customers, and stays resilient.
NBFC compliance isn’t just a box to tick; it’s the backbone of your NBFC’s success. It safeguards your license, ensures business continuity, and mitigates risks.
After NBFC Advisory, your story could look like this:
- No more scrambling for deadlines or breaking down regulatory jargon.
- Proactive measures to safeguard your operations and reputation.
- Confidence in your compliance, freeing you to focus on innovation.
Mitigates Financial Risks:
Mitigates Financial Risks:
Reduces Operational Risks:
Reduces Operational Risks:
Protects Your Reputation:
Protects Your Reputation:
Ensure Business Sustainability
Ensure Business Sustainability
Why Are NBFC Compliances Crucial?
Compliance isn’t just a legal obligation; it’s essential for maintaining your license and ensuring your company’s longevity. Failure to adhere to NBFC RBI compliance requirements can lead to severe penalties, operational setbacks, or even the revocation of your NBFC license.
Protect Your Reputation:
Non-compliance can tarnish your reputation. Customers and investors are more likely to trust a company that adheres to RBI regulations.
Ensure Businesss sustainbilty:
Maintaining compliance is vital for business continuity. Non-compliance can jeopardize your license, leading to potential closure.
Reduce Operational Risks: Compliance ensures that NBFCs follow stringent internal controls and risk management practices, reducing the likelihood of fraud, data breaches, and other operational risks.
Mitigate Financial Risks: Non-compliance can lead to hefty fines and legal expenses. Maintaining compliance minimizes these financial risks, allowing resources to be directed toward growth and NBFC portfolio development rather than penalties.
One-Time Mandatory Registrations for All NBFCs
- Every NBFC must register with all four credit bureaus – CIBIL, Equifax, Experian, and CRIF Highmark.
- Registration must be completed before disbursing the first loan or before commencing financial operations.
- Monthly reporting of the entire loan book must be submitted to CICs by the 7th of every following month.
- Mandatory for new entity registration and new borrower KYC verification.
- CKYC for new borrowers must be completed within 3 days of loan disbursement.
- Helps in streamlining customer onboarding and reducing fraud risks.
- Every NBFC must register with FIU-IND to track and report suspicious transactions.
- Mandatory for transactions above ₹10 Lakhs or high-value cash transactions.
- Helps in preventing money laundering and financial fraud.
- Required for entity registration on the NESL platform for digital financial transactions.
- NBFCs must upload and provide charge-related information to the IBBI within 7 days of charge creation.
- Ensures compliance with digital loan documentation and debt recovery processes.
- Mandatory registration for securitization and asset reconstruction transactions.
- Helps in tracking financial asset ownership and security interests.
- Ensures NBFC compliance with SARFAESI Act regulations.
Compliance Checklist for NBFCs
Ensure timely NBFC compliance by following THE comprehensive checklist, aligned with RBI norms and directives.
Here’s a glimpse of what we will keep track of:
Different types of NBFCs have distinct obligations depending on their liabilities and activities:
- Non-Deposit Accepting NBFCs
- Other Non-Deposit Holding Companies
- Deposit Accepting NBFCs
- Systemically Important (NBFC-ND-SI)
- Infrastructure Debt Fund NBFC (IDF-NBFC)
- Investment and Credit Company (ICC)
- Microfinance Companies (MFIs)
- Mortgage Guarantee Companies
- Infrastructure Finance Company (IFC)
- Core Investment Company (CIC)
As shown in the table below, an NBFC must adhere to annual, monthly, and quarterly compliance:
Compliance Checklist for NBFCs
Ensure timely compliance by following THE comprehensive checklist, aligned with RBI norms and directives. Here’s a glimpse of what you’ll need to keep track of:
NBFCs are classified according to their activities and liabilities—
- Infrastructure Debt Fund NBFC (IDF-NBFC)
- Investment and Credit Company (ICC)
- Microfinance Companies (MFIs)
- Mortgage Guarantee Companies
- Infrastructure Finance Company (IFC)
- Core Investment Company (CIC)
- Infrastructure Debt Fund NBFC (IDF-NBFC)
- Investment and Credit Company (ICC)
- Non-Operative Financial Holding Company (NOFHC)
- Microfinance Companies (MFIs)
- Mortgage Guarantee Companies
- Infrastructure Finance Company (IFC)
- Core Investment Company (CIC)
As shown in the table below, an NBFC must adhere to annual, monthly, and quarterly compliance:
Annual compliance
The year-end rush doesn’t have to be chaotic. Here’s how our checklist ensures everything is squared away:
| Particulars | Timeline |
|---|---|
| Unaudited March Monthly Return/NBS7 | By 30th June |
| Audited March Monthly Return/NBS7 | Upon completion |
| Statutory Auditors Certificate on Income & Assets | By 30th June |
| Information about Companies with FDI/Foreign Funds | By 30th June |
| File Audited Annual Balance Sheet and P&L Account | One month from the date of signoff |
| Declaration of Auditors to Act as Auditors of the Company | Annually |
Monthly compliance
Stay ahead with monthly compliance; we set it on the reminder for you:
| Particulars | Timeline |
|---|---|
| Monthly Return | It must be done on the 7th of every month |
Periodical compliance
Keeping everything on track on a when and where-required basis:
| Particulars | Timeline |
|---|---|
| Director’s Appointment | Within 30 days of appointment |
| Resignation of Director (DIR-12 + Challan Receipt) | Within 30 days of resignation |
| Adoption of any notification in the ensuing Board Meeting & filing the certified copy with RBI |
The year-end rush doesn’t have to be chaotic. Here’s how our checklist ensures everything is squared away:
| PARTICULARS | TIMELINE |
| Unaudited March Monthly return/NBS7 | By 30th June |
| Audited March Monthly return/NBS7 | Upon completion |
| Statutory Auditors certificate on Income & Assets | By 30th June |
| Information about Cos having FDI/Foreign Funds | By 30th June |
| File Audited Annual Balance Sheet and P&L Account | One month from the date of signoff |
| Declaration of Auditors to Act as Auditors of the Company | Annually |
Stay ahead with monthly compliance; we set it on the reminder for you:
PARTICULARS | TIMELINE |
Monthly Return | It must be done on the 7th of every month |
Keeping everything on track on a when and where-required basis:
PARTICULARS | TIME LIMIT |
Director’s Appointment | Within 30 days of appointment |
Resignation of Director (DIR-12 + Challan Receipt) | Within 30 days of resignation |
Adoption of any notification in the ensuing Board Meeting & filing the certified copy with RBI |
|
Noted: It is critical for NBFCs granted a licence by the RBI to adhere to stringent compliance. The applicant must have a net fund of Rs. 10 crores. Operating smoothly in India requires each NBFC to obtain a licence from the RBI; failure to do so may result in penalties and license termination.
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A Detailed Look at Returns Filed by NBFCs with the RBI
Understanding the various returns required can be daunting. Here’s a quick overview of key returns you must manage:
- NBS-1 Return: Quarterly report for NBFCs holding public deposits, detailing financial status.
- NBS-2 Return: Conformance with prudential standards for public deposit-taking NBFCs.
- NBS-3 Return: Quarterly report on statutory liquid state investments.
- NBS-4 Return: Required from rejected corporations still holding public deposits.
- NBS-6 Return: Monthly report for deposit-accepting NBFCs with total assets over ₹100 crores.
- ALM Returns: Required for NBFCs accepting over ₹20 crores in public deposits.
Failing to comply with these requirements can result in severe penalties and jeopardize your NBFC license.
NBFCs-ND-SI must submit the following returns:
- The structural liquidity statement is submitted once a year.
- Returns from ALM- Asset Liability Management refer to NBFCs-ND-SI submitting numerous returns.
- Branch Information Return is a quarterly return that must be submitted.
- The statement of short-term dynamic liquidity is submitted monthly, and the interest rate sensitivity format is submitted every six months.
- Mismatch of Assets and Liabilities- This is an annual statement.
- ü NBS-7: This quarterly report includes a capital fund statement, risk-weighted assets, risk asset ratio, and other information
How: Weaving Compliance Into Growth
At NBFC Advisory, we don’t just manage compliance—we make it work for you. Our structured approach transforms compliance from a daunting task into a streamlined process, freeing you to focus on what truly matters — your Growth!
We simplify the chaos with tailored solutions that match your unique business needs. We are dedicated to managing your compliance calendar, ensuring timely filings, conducting in-depth audits, and training your team to master best practices. With proactive risk assessments and expert guidance, we help you avoid hurdles and dig out better growth opportunities.
Our expert services, curated for YOU
At NBFC Advisory, we offer a comprehensive suite of services tailored to meet your NBFC compliance needs:
Compliance Management:
We take charge of your NBFC RBI compliance with precision, freeing you to drive business growth.
Regulatory Support:
Count on our experts to simplify complex RBI regulations.
Custom Audit Services:
Comprehensive audits to uncover gaps in NBFC accounting.
Risk Assessment:
Risk evaluations specific to your NBFC portfolio and operations.
Training and Workshops:
Equipping your team with essential NBFC compliance knowledge and best practices.
Get started on your NBFC Compliances right now!!
Why NBFC advisory?
Before NBFC Advisory
- Overwhelmed by complex compliance requirements
- Difficulty in keeping up with frequent regulatory changes
- Fear of reputational damage due to compliance failures
- Risk of legal penalties due to non-compliance
- Constantly chasing deadlines
After NBFC Advisory
- Streamlined compliance management tailored to your needs
- Expert guidance that clarifies regulatory obligations
- Direct support in liaising with regulatory bodies
- Access to legal experts to mitigate risks and penalties
- Proactive support to ensure you stay ahead of compliance deadlines
These are some of the RBI compliances that NBFCs must follow; failure to do so could land them in hot water and result in a penalty.
It is critical for NBFCs that have been granted a licence by the RBI to adhere to stringent compliance. The applicant must have a net fund of Rs. 10 crores
To operate smoothly in India, each NBFC must get a licence from the RBI; failure to do so may result in a penalty and license termination.
Ready to Rewrite Your Compliance Story?
Our mission is to Make it Count. Don’t allow compliance challenges to hinder your progress. With NBFC Advisory at your side, you can be compliant and confident, and propel your NBFC organisation to achieve its full potential!
Simplifying Regulations, Empowering Growth
Frequently Asked Questions (FAQs)
NBFC compliance refers to the adherence to regulations and guidelines set by the Reserve Bank of India (RBI) for Non-Banking Financial Companies. This includes ensuring proper NBFC accounting, timely submissions of returns, audits, and maintaining comprehensive documentation to remain aligned with NBFC RBI compliance requirements.
The frequency of NBFC compliance reports varies—monthly, quarterly, and annually—depending on the specific requirements of NBFC RBI compliance. Proper NBFC accounting systems help streamline these submissions.
We offer tailored compliance management services, regulatory support, audits, risk assessments, and training to help you sail the complexities of NBFC compliance.
Immediately address the issue by consulting with NBFC compliance experts. Taking corrective action promptly can help mitigate potential penalties and demonstrate good faith in maintaining compliance.
Simply reach out through our contact form, and one of our experts will guide you through the next steps!
NBFCs must adhere to various regulatory requirements, including maintaining capital adequacy, filing returns (NBS-1, NBS-2, etc.), and ensuring adherence to RBI guidelines.
Non-compliance can lead to significant penalties, including fines, operational restrictions, or even cancellation of your NBFC license, which can severely impact your business operations.
Yes, risk assessments are essential for identifying potential risks within your operations or NBFC portfolio. They allow you to implement strategies to safeguard against financial and operational challenges.
Regularly monitor the RBI’s official website and subscribe to industry news platforms. Additionally, working with a compliance advisory firm like NBFC Advisory can help you stay informed about any regulatory changes affecting NBFCs.
