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Incorporate your NBFC in India with Ease!

Launch your NBFC in India with ease. Our dedicated team is here to guide you through each complex registration step, ensuring smooth compliance and aligning everything with your goals.

Simplifying Regulations, Empowering Growth Simplifying Regulations, Empowering Growth

Overview of NBFC Registration

As defined by Section 45-IA of the RBI Act of 1934 and the Companies Act of 2013, NBFCs (Non-Banking Financial Companies) have a significant role in financial operations that involve secured and unsecured loans, marketplace lending, investments, information services providers, and any other commercial reasons. NBFCs differ from Commercial and Cooperative Banks in that they do not need a banking license, but they are still required to go by the laws and guidelines that the Reserve Bank of India (RBI) regularly issues.

The RBI strictly regulates NBFCs and ensures they follow the policies established in Chapter III B of the RBI Act, 1934.

As the NBFC Registration process is lengthy, applicants must ensure they have all the necessary paperwork on hand and comply with all NBFC Registration regulations to avoid rejection.

nbfc registration

Want to know the 3 Core C's for NBFC Registration?

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    • More than 50% of total assets are financial assets.
    • The percentage of gross revenue from financial assets should be greater than 50%.
    • To incorporate an NBFC, the Companies Act of 1956 or the Companies Act of 2013 should be followed.
    • The company must have a minimum of INR 2 crore in net owned funds, which are determined using the company’s most recent audited balance sheet. Noted: As per a recent notification issued by RBI on October 22, 2021; – Regulatory minimum Net Owned Fund (NOF) for NBFC-ICC, NBFC-MFI and NBFC-Factors shall be increased to from ₹2 crore to ₹10 crore
    • NBFCs that accept deposits: Currently, the RBI is NOT approving any new licenses in this category.  
    • There are two categories of non-deposit-taking NBFCs: Type 1 without customer interface and Type 2 with customer interface. 

    Types of NBFC

    Investment and Credit Company is a company registered under the Companies Act, 2013 with its the primary business of loans and advances, asset finance, and providing finance for any activity other than the acquisition of its securities; it is also not classified as an NBFC in any other category. It is a consolidated version of prior forms such as Loan Company, Investment Company, and Assets Finance Company, allowing a single firm to carry out all three activities under the ICC brand. This firm requires a Net Owned Fund of INR 2 Crore to be started.

    It’s an expanded version of the Infrastructure Finance Companies, and IFC can only be a Sponsor for this Debt Fund. IDF is a corporation controlled by the Reserve Bank of India and registered under the Companies Act, 2013. It facilitates the flow of long-term loans into infrastructure projects and can raise funds by issuing rupee or dollar-denominated bonds with a minimum duration of five years.

    The MGC company’s primary goal is to provide a mortgage guarantee. Such businesses must get at least 90% of their revenue from mortgage guarantee business or at least 90% of their gross income from mortgage guarantee business. With a Net Owned Fund of INR 100 crore, MGC can get started.

    A NOFHC is a financial business organisation that will allow companies or groups to establish a new bank and all other financial services firms regulated by the RBI or other financial sector regulators.

     

    Micro Finance Institutions (NBFC-MFI) are non-deposit taking financial institutions having net owned funds of at least Rs.5 crore (for the North Eastern Region of India, it will be Rs. 2 crores). To remain MFI, it must have Qualifying Assets that account for at least 85% of its total assets. Loans disbursed to borrowers with a rural family income of not more than INR 125k or an urban and semi-urban household income of not more than INR 200K qualify as qualifying assets; the loan will be extended without collateral.

    NBFC-Factors is a financial institution with a minimum net worth of Rs 5 crores whose primary business is the acquisition of receivables on discount or the financing of such receivables through loans or advances or the creation of security interests over such receivables, but does not include typical bank lending.

    CIC NBFCs are involved in the acquisition of securities and shares, with shares and equity accounting for 90% of their total assets. The minimum asset size required is INR 100 crore.

    This is a new generation of tech-driven NBFC that runs a common platform for lenders and borrowers rather than lending on its own. The website brings together both lenders and borrowers. Participants are onboarded into the platform and then can conduct transactions through it. A net owned fund of INR 2 crore is also required.

    The NBFC Account Aggregator is a relatively new concept in the industry. NBFC Account Aggregator collects data from several users and distributes it to various financial institutions. An Account Aggregator’s responsibilities include supplying consumers with financial information that is aggregated and easily accessible. The NBFC Account Aggregator delivers accurate data.

    Recent Ammendment:

    As per a recent notification issued by RBI on October 22, 2021; – Regulatory minimum Net Owned Fund (NOF) for NBFC-ICC, NBFC-MFI and NBFC-Factors shall be increased to from ₹2 crore to ₹10 crore

    Which entities in India are not NBFCs?

    An NBFC in India does not include the following entities as their primary business:
    • Agriculture activity
    • Industrial activity
    • The purchase and sale of any items
    • Purchase/sale/construction of an Immovable property

    Advantages of NBFC Registration in India

      • Diverse Financial Solutions: Offers loans, portfolio management, and trading in money market instruments.
      • Higher Profitability: Lower investment requirements make NBFCs more profitable than traditional banks.
      • Simpler Registration: Faster, less complex, and more cost-effective registration process than obtaining a traditional bank license.
      • Quick Loan Processing: Faster loan processing and disbursal due to fewer regulatory constraints.
      • Flexible Loan Approvals: Loans can be approved without relying on CIBIL or credit scores.
      • Easy Loan Recovery: Swift loan recovery options through asset attachment, foreclosure, or repossession.
      • High Growth Potential: Expected to maintain an 18.5% CAGR between 2021 and 2026.
      • Easier Setup: Simpler to register than as a small bank, primarily serving small borrowers.

    Simplifying NBFC registration

    Registration Requirements:

    • Company Structure: The applicant must be a registered entity under the Companies Act of 1956 or 2013.
    • Director Expertise: At least one-third of the directors must have prior experience in the financial industry.
    • Business Plan: A comprehensive five-year business plan is required.
    • Minimum Net Owned Funds (NOF): The applying company must maintain a NOF of at least INR 2 crore, with applicable taxes paid.
    • Capital Quality: RBI will assess capital quality to ensure compliance with legal standards.
    • Creditworthiness: The company, its directors, and shareholders must have good credit with no history of intentional loan defaults to banks or NBFCs.
    • FEMA Compliance: If foreign investment is made, the company must comply with FEMA regulations. Foreign Direct Investment (FDI) is permitted from FATF-compliant countries.

    Registration Process

    NBFC Registration Process
    1. Register Under the Companies Act: Begin by registering your business as per the Companies Act, 1956/2013.
    2. Ensure Minimum NOF: Maintain the required NOF according to your NBFC type.
    3. Application Form: Complete and submit the application form on the RBI’s official website.
    4. Document Submission: Attach the necessary documents along with your application
    5. CARN Number: Upon submission, a CARN number will be issued to track the application status.
    6. Submit to RBI Regional Office: Send the application form to the RBI’s regional office.
    7. Approval: Registration is granted if all regulatory requirements are met.



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    Checklist of Documents Required for NBFC Registration

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    • Certified copies of the company’s COI, MOA, and AOA
    • Net worth certificate of Directors, Shareholders & Company
    • Certificates of education for the suggested directors
    • Highest experience certificates
    • Business profile of directors and shareholders
    • Credit report of directors & shareholders
    • KYC information, the company’s PAN, its GST number, and its address documentation
    • Company bank account details [Rs. 2 Cr. must have been placed as NOF]
    • Balance sheet that has been audited over the past three years or since incorporation
    • Disclosures by Related Parties
    • Income tax Returns
    • No lien exists on the fixed deposit, according to a banker’s report
    • Board resolution format for NBFC registration
    • A detailed action plan for the next five years that includes a risk assessment policy and a fair practices code
    • Business Structure & Loan Structure
    • IT Policy
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    Our NBFC Registration Solutions

    Comprehensive Guidance:

    Our team of experienced professionals will provide you with end-to-end assistance, ensuring a smooth and compliant NBFC registration process.

    Documentation and Preparation:

    Our team will assist you in gathering and organizing all the necessary documents required for the registration process, ensuring that you are fully prepared to submit an online application for NBFC. Later, our team will assist you in responding to RBI queries and objections.

    Regulatory Compliance:

    We will guide you through the various regulatory steps, ensuring that your NBFC complies with all relevant RBI master directions, RBI guidelines, and regulations are up to date. A highly experienced team and a minimum of Rs. 10 crores net-owned fund are required as a fixed deposit while applying for Nbfc registration with RBI.

    Application Submission:

    With our expert assistance, your NBFC registration COR application will be prepared and submitted to the Reserve Bank of India.

    Dedicated Support:

    Throughout the process, you'll have a dedicated support team to address your queries and keep you informed at every stage.

    Why NBFC Advisory?

    We know NBFC registration can be complex, so our team of seasoned experts is here to support you at every step.

    • Swift, Streamlined Process: Experience a faster, more efficient registration journey with automated document submission and coordinated support from government agencies.
    • Industry Insights and Expertise: Leverage our knowledge to gain insights on best practices and stay updated on emerging regulatory changes.
    • Tailored Solutions: Every business is unique; we personalize our registration support to fit your specific requirements.
    • Commitment to Excellence: Trust NBFC Advisory’s dedicated professionals to handle the complexities of NBFC registration, offering you confidence and peace of mind.
    • Growth-Oriented Approach: With our team handling your registration, you can concentrate on growing your business. We offer tailored guidance and ongoing support every step of the way.

    Before NBFC Advisory

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    Get started and register your NBFC successfully!

    Our mission is to Make it Count. Don’t let the challenges of NBFC registration hold you back. With NBFC Advisory by your side, you can focus on building your future while we handle the details, empowering your business to reach new heights!

    Simplifying Regulations, Empowering Growth

    Get started on your NBFC registration right now!!

    Get started on your NBFC registration right now!!

    FAQs

    NBFCs are non-banking finance companies that can lend and take deposits from the public. They are allowed to do some banking activities without a banking license.

    There are majorly two types of NBFC.

    • Deposit-Taking NBFC: NBFCs are allowed to take deposits from the public, lend through the public, and own funds like Bajaj Finance.
    • Non-Deposit-Taking NBFC: NBFCs are not allowed to take deposits from the public and will only conduct lending through their funds, e.g., Parfait Finance and Investment Private Limited and Davinta Finserv Private Limited.

    To register for the NBFC, an application needs to be made to RBI. However, after considering the valid grounds of the application, the RBI may issue the license. Those grounds are as follows: – 

     

    • Composition of the board of directors  
    • Source of Capital to Invest in NBFC 
    • No promoters or associated person shall be convicted of CIVIL and Criminal offenses, including section 138 of the Negotiable Instrument Act.

    Yes, to lend money at the pan-India Level, you must have either a banking license or a Non-Banking finance Company license from RBI.

    Based on Nature
    S.No. Nature Count
    1.  NBFC Accepting Deposit 558
    2. NBFC Not Accepting  Deposit 9446
    Based on Activities
    S.No. Activities Count
    1 NBFC- MFI 97
    2 NBFC – Infrastructure Debt fund 3
    3 NBFC- Factor 8
    4 NBFC- Core Investment company 59
    5 NBFC- Assets Finance Company  278
    6 NBFC- Infrastructure Finance company 9
    7 NBFC -P2P Lending 25
    8 NBFC – ARC 29
    9 NBFC-ICC 9346
    10 NBFC Assets Size 100 crore and above 946
    11 NBFC-Account Aggregator 5
    12 NBFC – Non operating financial holding company 3
    Note :- The difference in total due to various different dates on RBI website for the data updation . You may visit to www.rbi.org.in for the lates list.

    The minimum capital requirement to register the NBFC is 10 crore or more; however, if the existing NBFC holds a valid license before 22nd Oct 2021, it must maintain the NOF 5 crore by March 2025 and 10 crore by March 2027. However, for NBFC-P2P, NBFC-AA, and NBFCs with no public funds and no customer interface, the NOF shall continue to be ₹ 2 crores. It is clarified that there is no change in the existing regulatory minimum NOF for NBFCs – IDF, IFC, MGCs, HFC, and SPD.

    After registration, we offer ongoing support that includes:

     

    • Regular compliance monitoring and updates on regulatory changes.
    • Assistance with financial reporting and audits.
    • Advisory services for strategic growth and risk management.
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    We at NBFC Advisory are your true partners for your NBFCs growth. From providing a licence for your NBFC to Monitoring and providing legal and strategic advisory for your Non-Banking Financial Company, our experts are there for the overall development of all you need for your NBFC.

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