How to Register an NBFC Company in India?

Non-Banking Financial Companies (NBFCs) play an essential role in India's financial system in the landscape of financial services. They offer a various range of financial services, including loans, asset financing, investment advice, leasing and many more, especially in segments underserved by traditional banks. Due to their significance, the Reserve Bank of India (RBI) has laid down specific guidelines and procedures for registering an NBFC in India.

This blog will explore the detailed process of registering an NBFC, eligibility requirements, documents needed, key compliance points, and important updates based on the latest RBI regulations.

What is an NBFC?

An NBFC is a company which is registered under the Companies Act, 2013 (or earlier, refer as, the Companies Act, 1956), engaged in financial activities such as providing loans and advances, acquisition of shares, leasing, hire-purchase, insurance business, or chit funds, business of lending and investing. Lending through multiple modes such as Personal Loans, Home Loan, Gold Loan, Loans against securities, SME Loans, Educational Loans, Infrastructure Finance etc. Investing means buying of shares, debentures of other securities. However, NBFCs cannot accept demand deposits (like savings or current accounts) like banks do.

NBFCs are basically regulated by the RBI under the Reserve Bank of India Act, 1934, especially Sections 45-IA, 45-IB, and 45-IC.

Eligibility Criteria for Registering an NBFC

Before applying for NBFC registration with the RBI, a company must meet the following key requirements:

• Incorporation: The applicant must be a company registered under the Companies Act, 2013 (or 1956).
• Minimum Net Owned Fund (NOF): As per the latest RBI guidelines, the company must have a minimum NOF of ₹10 crore (for most NBFCs). Earlier, the limit was ₹2 crore, but RBI raised it to strengthen financial stability.
• Primary Business Test: More than 50% of the company’s assets and more than 50% of its income should come from financial activities to qualify as an NBFC.
• Fit and Proper Directors: The promoters/directors should meet RBI’s “fit and proper” criteria. Their background, experience, financial integrity, and absence of criminal records are assessed.
• Comprehensive Business Plan: A detailed plan demonstrating the viability of the proposed financial business is necessary.

Types of NBFCs

Before registering, identify the type of NBFC you wish to form. Broadly, NBFCs are categorized based on:

Liability Structure:

• Deposit-taking NBFCs (NBFC-D) – Accept public deposits with strict RBI regulations.
• Non-deposit-taking NBFCs (NBFC-ND) – Cannot accept public deposits.

Activity:

• NBFC-Investment and Credit Company (NBFC-ICC).
• NBFC-Micro Finance Institution (NBFC-MFI).
• NBFC-Factor.
• NBFC-Infrastructure Finance Company, (NBFC-IFC).
• NBFC-Asset Finance Company (NBFC-AFC).
• And others, as notified by the RBI.

Process to Register an NBFC in India

Incorporate a Company

• Register a private or public limited company under the Companies Act, 2013 through the portal of Ministry of Corporate Affairs (MCA). (www.mca.gov.in).
• Set the main object clause in the Memorandum of Association (MoA) to reflect financial business activities.

Ensure Minimum NOF of ₹10 Crore

• The paid-up equity capital must be infused, and net owned funds must reach ₹10 crore. The amount should come from authentic sources, which needs to be supported by proper KYC.

Open a Bank Account

• Open a bank account in the name of the company and deposit the NOF amount. Obtain a bank certificate confirming the deposit.

Prepare Required Documents

Key documents include:

• Certificate of Incorporation.
• Memorandum and Articles of Association.
• Board resolution approving the application.
• Net worth certificates from a Chartered Accountant.
• Banker’s report on the company.
• Audited financial statements of the company.
• KYC and CIBIL reports of directors and shareholders.
• Address proof of the registered office…!
• Detailed business plan (including projections for 3 years).
• Organizational structure and IT policy (if applicable).
• Income Tax PAN of the company and shareholding pattern.

File Online Application on RBI’s COSMOS Portal

• Visit the RBI’s COSMOS portal (https://cosmos.rbi.org.in) and fill out the online NBFC registration application form.
• Upload scanned copies of the required documents.
• After submission, you will receive a Company Application Reference Number (CARN).

Submit Hard Copies to RBI

• Print and compile all submitted documents and the application form.
• Send the signed hard copies to the RBI Regional Office under whose jurisdiction the company’s registered office falls.

RBI Scrutiny & Clarifications

• RBI examines the application and may seek additional clarifications.
• If the RBI is satisfied with the documents and the promoters’ background, it may conduct interviews or inspections.
• RBI may also call promoters/directors for personal interviews as part of its “fit and proper” verification process.

Grant of NBFC License

• On successful verification, RBI issues a Certificate of Registration (CoR) under Section 45-IA of the RBI Act.
• The NBFC can start business only after receiving this certificate.

Post-Registration Compliance

After registration, NBFCs must follow these key compliances:

• File annual returns and regular statements with RBI.
• Comply with RBI’s guidelines on Fair Practices Code, Know Your Customer, viz. (KYC), Anti-Money Laundering (AML), and Prudential Norms (asset classification, provisioning, capital adequacy, etc.).
• Maintain a minimum equity to Risk Weighted Assets Ratio (CRAR) of 15% or as prescribed by the RBI.
• Conduct statutory audits annually.
• Regularly update RBI about any significant changes in management or shareholding.

Note: While the CoR does not require annual renewal, RBI can cancel the license for serious non-compliance or prolonged inactivity.

Key RBI Updates for NBFC Registration (as of 2025)

• As per the RBI Circular dated October 2022, the minimum NOF requirement for NBFCs (other than NBFC-MFIs) has been increased to ₹10 crore.
• RBI has introduced a Scale-Based Regulation (SBR) Framework, categorizing NBFCs into Base Layer, Middle Layer, Upper Layer, and Top Layer for better risk management. New applicants must assess under which layer their NBFC will fall.
• Additional governance requirements have been imposed on NBFCs in the Upper Layer, including stricter fit-and-proper criteria and enhanced disclosure norms.

Advantages of Registering as an NBFC

• Diversified Business Scope: NBFCs can offer multiple financial services.
• Market Demand: They cater to the large segment of borrowers underserved by banks.
• Flexibility: Fewer restrictions compared to banks in designing financial products.
• High Profit Potential: With prudent risk management, NBFCs can be highly profitable.

Fees for Registering an NBFC

There is no fixed government fee for filing the NBFC application with RBI. However, professional fees for consultants, company incorporation costs, document preparation, and compliance our charges range from 7.5 lakhs to ₹8 lakhs or more (without GST & Govt. fee), depending on complexity.

How to get NBFC certificate online? 

On your behalf, we shall be making an application with a complete set of documents. This application would also be submitted to the RBI office in physical. One can expect 7-8 months for receiving the NBFC Certificate.

Why Choose Us for NBFC Registration?

• Expert Guidance: Our team of NBFC consultants has years of experience handling complex NBFC registration processes.
• Customized Support: We provide end-to-end assistance, including drafting a business plan, preparing documents, and coordinating with RBI officials.
• Transparent Pricing: We offer clear and affordable pricing with no hidden charges.
• Timely Delivery: We help you complete the registration in the fastest possible time.
• Post-Registration Support: Our services don’t end at registration; we assist in RBI compliance, reporting, and ongoing governance.

Conclusion

Registering an NBFC in India is a structured but also challenging and bit complex process that demands thorough planning, adequate capital, and strict compliance with RBI guidelines. With the rising of high demand for financial services, NBFCs hold massive potential to support the financial inclusion and economic growth in India. However, the prospective of promoters must ensure adherence to every step outlined above, maintain transparency and regularly update themselves with RBI's evolving regulations.

For accurate details and the latest updates, always refer to:

• RBI official website: www.rbi.org.in
• MCA portal: www.mca.gov.in

If you’re planning to start an NBFC, it’s recommended to get the professional advice from legal and financial experts experienced in RBI compliance, as rules are subject to change.

FAQs

Q1: Can an individual apply for an NBFC license?

No, only a company incorporated under the Companies Act can apply for an NBFC license. Individuals cannot directly register as an NBFC.

Q2: How long does it take to register an NBFC?

Typically, it takes 7–8 months to complete NBFC registration, depending on document readiness, RBI scrutiny, and clarifications.

Q3: Do I need to renew my NBFC registration every year?

No, the NBFC registration certificate does not need annual renewal. However, compliance with RBI’s ongoing regulations, annual returns, and periodic filings is mandatory.