NBFC Annual Compliance in India: A Regulatory Roadmap

1. Service Overview / Introduction

A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 2013 and regulated by the Reserve Bank of India (RBI) under Section 45-IA of the RBI Act, 1934. NBFCs engage in financial activities such as lending, investment, leasing, hire purchase, and asset financing, without enjoying full banking privileges.

RBI registration is mandatory before commencing Non-Banking Financial Company operations. Operating without a valid Certificate of Registration (CoR) constitutes a regulatory offence and attracts strict penal consequences.

This service covers complete NBFC registration assistance, including category selection, documentation, RBI filing through the PRAVAAH portal, and post-registration compliance readiness.

2. Why This Service Is Required (Legal & Business Need)

Legal Requirement

1. RBI mandates prior registration for any entity conducting financial business as its principal activity.
2. Unregistered NBFC operations are treated as illegal financial activity under RBI Act.
3. RBI applies fit and proper, capital adequacy, governance, and business viability tests before granting approval.

Business Requirement

1. Enables lawful lending and financial operations
2. Essential for raising institutional funding
3. Required for co-lending, securitisation, and fintech partnerships
4. Builds regulatory and market credibility

3. Applicable Laws, Rules & Authorities

Statutory Framework

1. Reserve Bank of India Act, 1934 (Section 45-IA)
2. RBI Master Directions for Non-Banking Financial Company
3. Companies Act, 2013
4. FEMA, 1999 (for foreign investment)
5. Income Tax Act, 1961

Regulatory Authorities

1. Reserve Bank of India (Primary Regulator)
2. Registrar of Companies (MCA)
3. Income Tax Department
4. GST Authorities (if applicable)

4. Eligibility Criteria

To apply for NBFC registration, the applicant must satisfy the following:

Corporate Eligibility

1. Company incorporated in India (Private or Public Limited)
2. Main object clause reflecting NBFC activities
3. Registered office in India

Financial & Governance Eligibility

1. Minimum Net Owned Funds (NOF): ₹10 Crore
2. Funds must be own funds, not borrowed
3. At least one director with financial/banking experience
4. Clean credit and regulatory track record of promoters/directors
5. Principal business test satisfied (50-50 criteria)

5. Categories of Non-Banking Financial Company & Which One to Apply (Critical Section)

Choosing the correct NBFC category is one of the most crucial decisions at the registration stage. RBI grants registration category-specific, and post-registration activity outside the approved category is prohibited.

A. Classification Based on Deposit Acceptance

Category	Description	When to Apply
NBFC-ND (Non-Deposit Taking)	Cannot accept public deposits	Most fintechs, lending start-ups
Non-Banking Financial Company -ND-SI	Asset size ≥ ₹500 crore	Large-scale lending operations
NBFC-D (Deposit Taking)	Can accept public deposits	Rare; requires strong track record

Practical Insight: RBI is extremely restrictive in granting NBFC-D licenses. Over 90% of new registrations are NBFC-ND.

B. Classification Based on Business Activity

NBFC Category	Applicable When You Intend To
NBFC-ICC (Investment & Credit Company)	Provide loans, advances, investments (most common)
NBFC-MFI (Microfinance)	Lend to low-income households as per RBI norms
NBFC-FACTOR	Engage in factoring of receivables
NBFC-IDF	Infrastructure debt financing
NBFC-IFC	Infrastructure lending (large projects)
NBFC-HFC*	Housing finance (now regulated by RBI)

Recommended for 90% applicants: NBFC-ICC, as it provides maximum operational flexibility.

C. Specialised / Restricted Categories

Category	Applicability
Core Investment Company (CIC)	Group holding companies
NBFC-P2P	Peer-to-peer lending platforms
NBFC-AA	Account Aggregators
NBFC-NOFHC	Holding company for banks

These categories require separate approvals, higher scrutiny, and tailored business models.

6. Documents Required for Non-Banking Financial Company Registration (Comprehensive List)

The following documents are required to be prepared, certified, and submitted to the Reserve Bank of India at the time of NBFC registration. RBI may seek additional documents depending on the NBFC category, promoter background, and business model.

A. Corporate & Incorporation Documents

1. Certificate of Incorporation issued by the Registrar of Companies
2. Corporate Identification Number (CIN)
3. Permanent Account Number (PAN) of the Company
4. Memorandum of Association (MOA) containing NBFC-specific object clauses
5. Articles of Association (AOA)
6. Registered Office Address Proof (Electricity bill / Lease deed / Ownership proof)
7. Board Resolution approving NBFC registration and authorising signatory

B. Capital & Net Owned Funds (NOF) Documents

1. Statutory Auditor’s Certificate certifying minimum Net Owned Funds of ₹10 Crore
2. Bank statements reflecting infusion of paid-up equity capital
3. Sources of funds declaration (confirming funds are not borrowed)
4. Shareholding pattern (pre and post capital infusion)
5. Valuation report (if applicable)

C. Promoter & Director Documentation

1. Identity and Address Proof of all Directors and Promoters
2. Director Identification Number (DIN) and Director KYC
3. Detailed Curriculum Vitae of each Director
4. Experience certificates supporting banking/financial expertise
5. Declarations on Fit and Proper criteria
6. Credit reports (CIBIL) of Directors and Promoters
7. Net worth statements of Promoters (certified by CA)

D. Financial & Accounting Records

1. Audited financial statements of the Company (if existing entity)
2. Audited financial statements of Group Companies (if any)
3. Projected financial statements (minimum 5 years)
4. Asset–Liability Management (ALM) projections
5. Cash flow and profitability projections

E. Business & Operational Documents

6. Detailed Business Plan (minimum 5 years) covering:
7. Nature of financial activities
8. Target customer segments
9. Lending products and credit appraisal process
10. Risk management framework
11. Organizational structure
12. Market analysis and feasibility assessment
13. IT systems and data security overview (if fintech-enabled model)

F. Regulatory Policies & Internal Frameworks

1. Know Your Customer (KYC) Policy
2. Anti-Money Laundering (AML) Policy
3. Fair Practices Code (FPC)
4. Risk Management Policy
5. Internal Control & Audit Policy
6. Information Security Policy (if applicable)
7. Outsourcing Policy (if third-party vendors are involved)

G. Statutory & Regulatory Declarations

1. Declaration of Non-Acceptance of Public Deposits (for NBFC-ND)
2. Declaration confirming principal business criteria (50-50 test)
3. FEMA compliance declaration (if foreign investment exists)
4. Details of group entities and organisational chart
5. Details of past or pending regulatory actions (if any)

H. RBI Application & Procedural Documents

1. Online application filed through RBI PRAVAAH Portal
2. Application reference number generated by RBI
3. Physical application set submitted to RBI Regional Office
4. Covering letter addressed to the Regional Director, RBI

Regulatory Note

The Reserve Bank of India retains discretionary power to:

1. Seek clarifications or additional documentation
2. Conduct background verification of promoters and directors
3. Call for personal hearings or representations
4. Incomplete or inaccurately prepared documentation is the most common cause of application rejection or delay.

7. Step-by-Step Registration Process

Step 1: Company Incorporation

Incorporate a company with NBFC-aligned objects under Companies Act.

Step 2: Capital Arrangement

Infuse ₹10 crore NOF and obtain statutory auditor certification.

Step 3: Online Filing via PRAVAAH Portal

Submit application and documents through RBI’s PRAVAAH portal.

Step 4: Physical Submission

Submit hard copies to the jurisdictional RBI regional office.

Step 5: RBI Scrutiny & Clarifications

RBI examines:

1. Source of funds
2. Business model sustainability
3. Governance strength
4. Regulatory compliance readiness

Step 6: Grant of Certificate of Registration

Upon satisfaction, RBI issues the CoR, enabling lawful Non-Banking Financial Company operations.

8. Timeline & Government Fees

Indicative Timeline

Stage	Timeframe
Incorporation & documentation	4–6 weeks
RBI processing & scrutiny	3–6 months
Total duration	4–9 months

Government Fees

1. RBI Application Fee: ₹3,00,000 (approx., non-refundable)
2. ROC Fees: As per MCA schedule
3. Professional Fees: Variable (scope-based)

9. Benefits of NBFC Registration

1. Legal authority to conduct financial business
2. Access to institutional and wholesale funding
3. Eligibility for co-lending & securitisation
4. Higher investor confidence
5. Regulatory credibility and scalability

10A. Category-Specific & Conditional RBI Returns (Additional Mandatory Filings)

In addition to routine monthly, quarterly, and annual filings, the RBI mandates category-specific, deposit-linked, and supervisory disclosures. These apply only when the Non-Banking Financial Company falls within a defined regulatory trigger (deposit acceptance, systemic importance, digital operations, etc.).

Failure to identify applicability is treated as non-compliance, even if the return itself is conditional.

A. Returns Applicable Exclusively to Deposit-Taking NBFCs (NBFC-D)

Form	Purpose	Frequency	Due Date
DNBS-05	Return on Public Deposits	Quarterly	15 days from quarter end
DNBS-06	Reconciliation of Public Deposits	Annual	30 May
DNBS-07	Auditor Certificate on Deposits	Annual	With audit
Liquid Asset Statement	Statutory liquidity compliance	Monthly	10 days from month end

Regulatory Note: RBI is extremely stringent on public deposit protection. Even minor delays attract supervisory remarks.

B. Returns Applicable to Systemically Important NBFCs (NBFC-ND-SI)

Requirement	Nature	Frequency
Internal Capital Adequacy Assessment Process (ICAAP)	Board-approved governance document	Annual
Stress Testing & Liquidity Risk Reports	Supervisory disclosure	Periodic
Concentration of Credit / Exposure Norms	Regulatory monitoring	Ongoing
Enhanced ALM Disclosures	Risk-based supervision	Quarterly

C. Returns for Digital / Fintech-Enabled NBFCs

Compliance	Applicability	Frequency
Cyber Security & IT Governance Framework	Tech-driven NBFCs	Annual
Outsourcing Risk Disclosure	NBFCs using third-party vendors	Annual
Incident / Breach Reporting	Event-based	Immediate
Data Localisation Compliance	Applicable NBFCs	Continuous

10 B. Applicability Disclaimer Matrix (Which NBFC Files What)

This matrix prevents over-compliance confusion and under-compliance risk.

NBFC Category	Mandatory Filing Scope
NBFC-ND (Non-Systemic)	DNBS-02, DNBS-04A, CIC reporting, FIU-IND, CKYCR
NBFC-ND-SI	DNBS-01, DNBS-03, DNBS-08, ALM, ICAAP, Stress Testing
NBFC-D	All ND-SI filings plus DNBS-05, 06, 07, Liquid Assets
NBFC-ICC	Core NBFC returns only
NBFC-MFI	NBFC returns + MFI-specific disclosures
CIC	DNBS-11, DNBS-12
NBFC-P2P	DNBS-14
NBFC-AA	AA-specific returns + IT governance
Fintech NBFC	Core returns + cyber & outsourcing disclosures

Important: Filing a non-applicable return is NOT safer than non-filing; it may trigger regulatory queries.

10 C. Master RBI Returns Table (100% Exhaustive – FY 2025–26)

This table consolidates every RBI return applicable to Non-Banking Financial Company, across categories.

A. Core RBI Returns

Form Code	Return Name	Applicability	Frequency
DNBS-01	Financial Parameters	NBFC-ND-SI / D	Quarterly
DNBS-02	NBS Return	NBFC-ND	Annual
DNBS-03	Asset Quality	NBFC-ND-SI / D	Quarterly
DNBS-04A	Basic Return	All NBFCs	Quarterly
DNBS-05	Public Deposits	NBFC-D	Quarterly
DNBS-06	Deposit Reconciliation	NBFC-D	Annual
DNBS-07	Auditor Deposit Certificate	NBFC-D	Annual
DNBS-08	CRILC	NBFC-ND-SI / D	Quarterly
DNBS-010	Audited Financials	All NBFCs	Annual

B. Category-Specific RBI Returns

Form Code	Category	Purpose
DNBS-11	CIC	Financial Parameters
DNBS-12	CIC	ALM
DNBS-14	P2P	Platform Operations
FLA Return	FDI NBFCs	Foreign Liabilities
ALM Returns	ND-SI / D	Liquidity Risk
ICAAP	ND-SI	Capital Adequacy
Cyber Security Report	Digital NBFCs	IT Risk

C. Allied Regulatory Filings (Mandatory but Non-DNBS)

Authority	Filing
FIU-IND	CTR / STR
Credit Bureaus	Monthly credit reporting
CKYCR	KYC uploads
NESL	Debt information
MCA	AOC-4, MGT-7
Income Tax	ITR, Tax Audit

Conclusion

Non-Banking Financial Company registration is a high-stakes regulatory process, where incorrect category selection, inadequate documentation, or capital structuring errors can result in rejection or prolonged delays. A structured, well-advised approach aligned with RBI’s current regulatory expectations is essential. This guide provides a complete, updated, and regulator-accurate roadmap for Non-Banking Financial Company registration in India. insert the calendar with this.