NBFC Registration

Registering a Non‑Banking Financial Company (NBFC) is a strategic step for businesses aiming to operate in the financial services domain without a traditional banking license. An NBFC provides critical financial services such as loan financing, asset financing, investment management, and credit facilitation — all under the regulatory framework established by the Reserve Bank of India (RBI). 

However, the process of NBFC registration involves complex regulatory requirements, strict compliance norms, thorough documentation, and a clear business strategy. At Helios Global, we provide comprehensive consulting services that guide businesses through every stage of this journey — from initial advisory and documentation to regulatory submission and post‑registration compliance.

This guide explains: 

• What an NBFC is and why registration matters 

• Categories and types of NBFCs 

• The legal and regulatory framework in India 

• Eligibility criteria and capital requirements 

• Step‑by‑step registration process 

• Required documentation and compliance obligations 

• Benefits of NBFC registration 

• How Helios Global supports your registration journey 

• Key FAQs about NBFC registration 

NBFC registration refers to obtaining a license from the Reserve Bank of India (RBI) that allows a company to operate as a Non‑Banking Financial Company. Unlike banks, NBFCs cannot accept demand deposits, but they can engage in offering loans, credit facilities, investments, and related financial services, subject to RBI regulation. 

NBFC registration provides credibility, regulatory oversight, access to financial markets, and broader service capabilities that are crucial for long‑term success in the financial sector.

 Key Features of NBFCs

Understanding NBFCs as a financial structure is important before beginning registration. Here’s what distinguishes an NBFC: 

 Financial Services Provider 

NBFCs are entities that engage in financial activities like lending, investments, credit provision, hire purchase, and asset financing without being classified as banks. 

 Regulated by RBI 

Registered NBFCs are regulated by the Reserve Bank of India under Section 45‑IA of the RBI Act, 1934. This regulation ensures financial prudence, compliance, ethics, and consumer protection.

 Scope of Operations 

NBFCs can finance individuals and corporate entities, invest in securities and structured products, provide microfinance (in specific categories), and support other financial activities as permitted.

Cannot Accept Demand Deposits 

Unlike banks, NBFCs are generally not permitted to accept demand deposits from the public unless they receive specific authorization from RBI. 

 Diverse Categories 

NBFCs include Investment & Credit Companies (NBFC‑ICC), Infrastructure Finance Companies (NBFC‑IFC), Microfinance NBFCs (NBFC‑MFI), and others, each with specific requirements and permissible activities.

 Who Needs NBFC Registration?

Any company that seeks to conduct non‑bank financial activities such as lending, credit facilitation, investment in financial assets, and other financial services, must obtain NBFC registration from RBI before commencing operations. 

Examples of activities requiring NBFC registration include: 

• Personal or business lending 

• Asset financing or leasing 

• Investment management services 

• Hire purchase operations 

• Loan syndication 

• Microfinance services (if structured under NBFC‑MFI rules) 

Without registration, engaging in these activities constitutes unlawful financial operations under Indian regulations.

NBFC registration is governed by the Reserve Bank of India Act, 1934, particularly Section 45‑IA, which mandates authorization from RBI for companies engaged in financial business. 

 RBI’s Role 

The RBI issues licenses, monitors ongoing compliance, and sets prudential standards for NBFCs. This includes capital adequacy norms, reporting obligations, risk management guidelines, and consumer protection protocols.

 Companies Act Compliance 

Before NBFC registration, the business must be incorporated as a company under the Companies Act, 2013. The RBI does not grant licenses to partnerships or LLPs directly; only corporate entities are eligible. 

 RBI Scale‑Based Regulatory Framework 

NBFCs are classified under RBI’s Scale‑Based Regulatory (SBR) framework, which imposes differentiated standards based on size, complexity, and risk profile of the financial entity. This ensures stability and risk containment across the financial sector. 

Eligibility Criteria for NBFC Registration

To qualify for NBFC registration, your company must meet specific eligibility criteria: 

Company Incorporation

The entity must be a public limited or private limited company incorporated under Section 3 of the Companies Act. 

 Net Owned Funds (NOF) Requirement

Traditionally, an NBFC must maintain a minimum Net Owned Fund of ₹2 crore (₹10 million) as a financial buffer demonstrating financial strength.

 Fit & Proper Management

Directors and senior management must meet RBI’s “fit and proper” criteria — including a clear credit history, professional experience in financial activities, and ethical track records. 

 Business Plan

A comprehensive business plan outlining strategic goals, operational framework, target markets, risk management practices, and compliance strategies is required for RBI evaluation.

 Clean Credit History

The company and its directors must have a clean credit and legal history with no significant defaults, litigations, or regulatory violations. 

 Minimum Experience

Though not uniformly codified, RBI often expects key management personnel to have relevant experience in financial services to ensure sound governance. 

These criteria emphasize financial prudence, managerial integrity, and operational readiness — the foundations of a responsible NBFC.

Step‑by‑Step NBFC Registration Process in India

The NBFC registration process comprises several key stages: 

 Incorporate Your Company 

Register your business as a private limited or public limited company under the Companies Act, 2013. This is the foundational step before approaching RBI. 

Prepare NBFC Business Plan 

Prepare a detailed business plan outlining your financial activities, market strategy, risk management framework, IT and operations structure, target audience, and five‑year growth projections. 

 Ensure NOF Compliance

Demonstrate that your company meets the minimum net owned fund requirement and that funds are invested appropriately to support financial operations.

 Compile Required Documents

Assemble all documentation for your NBFC application, including corporate documents, board resolutions, directors’ KYC, financials, business plan, risk frameworks, and proof of NOF.

 Submit Application to RBI 

File your NBFC registration application via RBI’s online portal and submit physical copies as required by the regional office.

 RBI Evaluation

The RBI reviews your application thoroughly, assessing operational readiness, compliance culture, governance framework, and financial sustainability. This audit may involve clarifications or additional information requests from the regulator.

 Certificate of Registration

Upon satisfactory evaluation, RBI issues the Certificate of Registration (CoR), allowing your company to commence regulated NBFC operations. 

 Commencement of Operations 

Post‑registration, your NBFC must begin operations within the stipulated period (typically six months) and comply with all RBI reporting and governance requirements. 

 Documentation Checklist for NBFC Registration

A complete and organized documentation set increases the likelihood of RBI approval. Key documents include: 

 Corporate and Legal Documents

• Certificate of Incorporation 

• Memorandum and Articles of Association 

• Board resolution approving NBFC application 

• Directors’ KYC and identity proofs 

Financial Documents 

• Audited balance sheets 

• Proof of Net Owned Funds 

• Financial projections and capital adequacy details 

Business & Operational Plans

• Business plan with market strategy 

• Risk management and asset‑liability frameworks 

• IT infrastructure and cybersecurity strategy 

 Compliance Framework Documents

• Fair Practices Code 

• Anti‑Money Laundering (AML) and KYC policies 

• Governance and internal control frameworks 

Director and Management Credentials 

• Experience certificates 

• Fit and proper declarations 

• Clean credit reports 

Thorough documentation demonstrates your company’s preparedness, stability, and governance strength — all critical to RBI assessment.

Registering as an NBFC brings several strategic advantages: 

 Legitimacy & Credibility

An RBI license signals legal compliance and financial governance, earning the trust of customers, partners, and investors.

 Access to Funding Options

Registered NBFCs can raise capital through bonds, institutional investors, external commercial borrowings, and public deposits (subject to RBI permissions).

Business Expansion 

With an NBFC structure, you can launch diversified financial products and expand into new markets. 

 Regulatory Oversight

RBI’s structured supervision protects your operations, promotes discipline, and enhances risk management. 

These benefits strengthen an NBFC’s competitive position and operational sustainability.