NBFC Registration in India: Process, Fees, Documents & Compliance

If you want to start a lending, investment or asset financing business in India, then you need RBI approval first. No company can carry on non-banking financial business without a valid Certificate of Registration (CoR) according to the Section 45IA of the RBI Act, 1934. This makes how to register NBFC in India an important question to get before you commit capital or start client facing operations.

This process involves incorporating a company, meeting the minimum capital threshold, and applying through RBI’s online system. RBI evaluates your promoters, capital source and business plan closely, so incomplete applications are a common reason for delay.

A non-banking financial company (NBFC) is a company that is registered under the Companies Act 2013 and carries on several financial activities such as loans and advances, investment in shares or bonds, hire-purchase, leasing or chit fund business as defined under Section 45-I(f) of the RBI Act 1934. Unlike a bank, an NBFC cannot accept demand deposits or issue cheques drawn on itself.

Your company must pass the RBI’s 50-50 test to qualify as an NBFC. Here more than 50% of your assets are required to be financial assets, and more than 50% of your gross income must be generated from those assets. If your company meets this test, you need RBI registration irrespective of your size.

NBFC registration is important because operating a lending or investment business without a CoR is considered as a criminal offence under Section 45 IA. Registration gives a legal standing to your business to raise funds and to extend credit, since most banks verify registration before dealing with a finance company.

Registration also shows credibility to customers and investors, since RBI regulated NBFCs undergo supervision and conduct requirements, which matters if you're raising external capital.

When you register your NBFC with RBI, you get several advantages. Listed below is what you’ll; gain:

Legal Recognition

NBFC Registration gives you formal authorisation to carry on financial activities, that will protect you from prosecution under Section 45IA

Access to Funding

Registered NBFC can raise funds from banks and investors easily, since the regulatory status reduces counterparty risk.

Wider Business Scope

Depending on your category, you can offer loans, leasing, microfinance, housing finance or peer-to-peer lending.

Regulatory Credibility

Customers can verify your registration details on the RBI’s website, which builds trust that cannot be built as an unregulated lender.

Structured Growth

RBI’s Scale Based Regulation (SBR) framework enables you to plan your growth in stages, since obligations scale with your asset size.

Before you apply for NBFC registration, you will need to meet these conditions:

• Your business must be incorporated as a Private Limited Company or Public Limited Company under the Companies Act, 2013.

• LLPs, partnership firm, sole proprietorships, and trusts cannot register as an NBFC.

• Your Memorandum of Association must include financial activity as the main objective.

• Minimum NOF of INR 10 crore is required for most categories, with lower threshold of NBFC-MFI (INR 5 crore) and NBFC-P2P or Account Aggregators (INR 2 crore) and a higher threshold for Infrastructure Finance Companies.

• Your directors and promoters must meet the ‘fit and proper’ criteria of RBI, with a clean credit history.

• At least one director should have experience in banking or financial services.

The RBI regulates and licences NBFCs under Chapter III-B of the RBI Act, 1934. RBI's Department of Regulation reviews your application and it is processed through the Regional Office based in where your registered office is located. RBI continues to supervise your NBFC after registration from time to time through inspections and the scale based regulation framework.

The documents required for NBFC registration are extensive, as RBI wants to see a complete picture of your company, capital, and promoters.

Company Documents

• Certificate of Incorporation and Memorandum & Articles of Association

• Board resolution approving the NBFC application

• Audited financial statements for the last three years, where applicable

Capital and Financial Documents

• Net Owned Fund certificate from a chartered accountant

• Banker’s certificate confirming the NOF is held as unencumbered funds

• Business plan and planned financial statement for the next three years.

Director and Promoter Documents

• KYC documents (PAN, Aadhaar, address proof) of all directors and shareholders

• Credit reports (CIBIL) of directors and promoters

• Experience details of directors with a financial service background

You must keep these documents and certified copies ready, since RBI may raise queries during review, and delays can extend your timeline

Step 1: Incorporate Your Company

You must register a Private Limited or Public Limited Company with the MCA, with financial activities in your MOA.

Step 2: Infuse Your Capital

Deposit the minimum Net Owned Fund into the company’s bank account and keep it as a fixed deposit.

Step 3: Prepare Your Application Documents

Prepare your business plan, financial statements, and director’s KYC as per the RBI’s checklist.

Step 4: Apply Through RBI’s Online Portal

You must now submit your application online by logging into the RBI PRAVAAH portal with the prescribed fee and receive an acknowledgement reference number.

Step 5: Submit Physical Documents

Send the physical copies to the RBI Regional Office with jurisdiction over your registered office (if required)

Step 6: Respond to RBI Queries

The RBI may demand clarification on your business plan or directors profile, respond to that promptly.

Step 7: Receive the Certificate of Registration

Once satisfied, RBI issues CoR and you can start operations.

The nbfc registration fees india mainly depends on the professional fees, the capital that you need to infuse, and government charges. Tabulated below is the NBFC Registration cost:

Note: The cost mentioned above includes the basic assistance you receive when you use our services for NBFC registration in India. The RBI’s application fee and capital requirement differ depending on the category and are subject to change from time to time. Our consultant will assist you with the current requirement. Before you proceed, please confirm the latest fee structure with our team.

Operating an NBFC business without a valid CoR is a criminal offence under Section 45-IA of the RBI Act, 1934. Under Section 58B (4A), violating this provision can lead to imprisonment of one to five years along with fine, and RBI can also instruct the banks to freeze your accounts and publish your entity’s name as unauthorised.

Even after registration, non-compliance with the RBI directions, such as failed submission of periodic returns or breaching capital norms, can invite penalties or cancellation of your CoR in serious cases.

On approval, the Reserve Bank of India (RBI) issues a Certificate of Registration (CoR) under Section 45-IA, which allows you to operate a non-banking financial business. It is based on your NBFC category like NBFC-ICC, NBFC-MFI or NBFC-Factor. This certificate is a reference for you in your relations with banks, investors and regulators.

Your CoR does not have a fixed expiry date, it is valid as long as you meet the RBI’s eligibility conditions, including the minimum NOF and principal business criteria. RBI can cancel your registration if you stop meeting these conditions or violate your registration terms.

NBFC compliance is more than simply registration, it's a continuous process. The following are generally the NBFC compliance requirements:

• Filing periodic returns with RBI as per your asset size and category.

• Maintaining minimum capital adequacy (CRAR)

• In compliance with KYC and AML regulations including FIU-IND registration.

• Following a fair practice code approved by your board

• Appointing statutory auditors and maintaining updated financial records.

If you stay current with these obligations, then it keeps your CoR in good position.

You need to inform the RBI if you change your registered office, directors, shareholding or business category after registration, and in some cases you must seek prior approval. Changes including 26% or more of paid up equity, or a change in management, usually require the RBI’s prior written approval.

You don't need to periodically renew the CoR, it says valid unless RBI cancels it. RBI reviews your SBR classification time to time as your asset size grows, this can shift your obligations without a formal renewal process.

Renewal Process

No separate renewal process is required to be followed, you can continue filing your periodic returns and maintaining the eligibility to keep your registration active.

Renewal Charges

You don't pay a renewal fee for your CoR, although you will continue to incur costs for statutory audits and compliance filings.

If you decide to stop the operations, then you can apply to RBI for voluntary cancellation of your CoR. This will need a board resolution, an auditor’s certificate confirming that you hold no public deposits or outstanding liabilities, and a written request explaining your reasons.

Some of the common and often ignored reasons can result in rejection of your application.

• Insufficient or unverifiable NOF: If the capital is not held in liquid form.

• Weak business plan: If your projections does not align with your promoter’s experience.

• Incomplete MOA objects: If the financial activities are not clearly stated as a main object.

• Documentation Gap: If the KYC is missing, audited financials or banker’s certificates are not present.

• Unclear source of funds: In case RBI is unable to trace the origin of your NOF.

State-wise Services

You can register NBFC in all the major states across India, including Maharashtra, Delhi, Tamil Nadu, Karnataka, Telangana and more. The RBI regional office that reviews your application depends on where your registered office is located and the processing time may also vary based on region. Our team assists you with NBFC registration india requirement for your state.

Industry-wise Services

You can find NBFC registration services at Companyregister.co.in, that suit the type of financial activity that your business carries out. Some of the common industries include:

• Investment and Credit companies (NBFC-ICC)

• Microfinance Institutions (NBFC-MFI)

• Factoring Companies (NBFC-Factor)

• Housing Finance Companies (HFC)

• Peer to Peer Lending Platforms (NBFC-P2P)

At Companyregister.co.in, we act as your NBFC registration consultant, taking you from incorporation to your CoR. We help you to structure your capital, prepare your business plan and to complete the documentation that meets the RBI standards, reducing unnecessary delay in application.

Our team also supports you with NBFC registration online by filing on the RBI’s portal and assist you on post-registration compliance too, so that your NBFC stays in good standing well after your certificate is issued.