NBFC Registration in India is mandatory for companies that want to carry on financial activities such as loans, advances, investments, leasing, hire purchase, or asset financing—without accepting demand deposits like banks. NBFCs are regulated by the Reserve Bank of India (RBI) under the RBI Act, 1934.
In this Saving Mantra guide, we explain what an NBFC is and the step-by-step process for NBFC Registration in India, including eligibility, documents, and post-registration compliance.
What is an NBFC?
A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act that provides financial services similar to banks but does not hold a banking license. NBFCs play a crucial role in credit delivery, especially to MSMEs and retail borrowers.
Types of NBFCs in India
- NBFC–ICC (Investment and Credit Company)
- NBFC–MFIs (Microfinance Institutions)
- NBFC–Factors
- NBFC–Infrastructure Finance
- NBFC–Account Aggregators
- NBFC–Peer-to-Peer (P2P)
Eligibility Criteria for NBFC Registration
To apply for NBFC registration with RBI, the company must:
- Be incorporated under the Companies Act, 2013
- Have a minimum Net Owned Fund (NOF) of ₹10 crore (as per latest RBI norms for most NBFCs)
- Have clean financial and credit history of promoters/directors
- Possess a robust business plan and compliance framework
- Meet “Fit & Proper” criteria for management
Benefits of NBFC Registration
- Legal authority to conduct lending and financial activities
- High credibility with banks and investors
- Ability to raise funds via equity, debt, and institutional borrowing
- Flexibility in operations compared to banks
- Strong growth potential in India’s credit market
Step-by-Step Process for NBFC Registration in India
Step 1: Company Incorporation
Incorporate a Private Limited or Public Limited Company with financial activities as the main object in the MOA.
Step 2: Arrange Minimum Capital (NOF)
Infuse the required Net Owned Fund and obtain a CA-certified Net Worth Certificate.
Step 3: Open Bank Account & Park Capital
Open a bank account and park the NOF amount as required by RBI.
Step 4: Prepare NBFC Documentation
Prepare a detailed set of documents including:
- Business plan (3–5 years)
- Fair Practices Code
- Risk management & AML policy
- KYC framework
- Board resolutions
Step 5: File Online Application with RBI
Submit the online NBFC application on RBI’s COSMOS portal and obtain the CARN number.
Step 6: Submit Physical Application to RBI
Submit the physical set of documents to the regional office of RBI.
Step 7: RBI Scrutiny & Due Diligence
RBI examines promoter background, financial soundness, governance, and compliance readiness. Clarifications may be sought.
Step 8: Grant of Certificate of Registration (CoR)
Upon satisfaction, RBI issues the NBFC Certificate of Registration, allowing commencement of NBFC operations.
Documents Required for NBFC Registration
- Certificate of Incorporation
- MOA & AOA
- Audited financial statements
- Net Owned Fund certificate
- Director & shareholder KYC
- Board resolutions
- Detailed business plan and policies
Timeline for NBFC Registration
NBFC registration generally takes 6 to 9 months, depending on RBI scrutiny and completeness of documentation.
Post NBFC Registration Compliance
- Regular RBI filings and returns
- Statutory audits and internal audits
- Compliance with prudential norms
- Maintenance of minimum capital adequacy
- Adherence to KYC, AML, and FEMA rules
Penalty for Operating Without NBFC License
Carrying out NBFC activities without RBI registration can attract severe penalties, business shutdown, and prosecution.
Why Choose Saving Mantra for NBFC Registration?
- RBI-focused compliance expertise
- End-to-end documentation and filing support
- Transparent and affordable pricing
- Liaison with RBI authorities
- Ongoing post-registration compliance assistance
Conclusion
NBFC Registration in India is a highly regulated but rewarding pathway for companies entering the financial services sector. By following the correct step-by-step NBFC registration process, businesses can obtain RBI approval and operate with confidence and compliance. Saving Mantra ensures a professional, smooth, and legally compliant NBFC registration experience.
Disclaimer
The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or professional advice. NBFC regulations, capital requirements, and RBI guidelines are subject to change. Readers are advised to consult qualified professionals before applying for NBFC registration or commencing financial activities.