Overview - NBFC Registration in India
If you’re an entrepreneur looking to tap into the fast-growing financial sector, starting an NBFC can be a profitable opportunity. Whether you plan to offer personal loans, business loans, hire-purchase, leasing, or digital lending services, getting an NBFC license from the RBI is the first step to making your vision a reality.
An NBFC (Non-Banking Financial Company) operates much like a bank but without the need for a banking license. This gives NBFCs greater flexibility while still allowing them to provide credit, investment, and financial services. In addition to lending, NBFCs can also acquire shares, stocks, bonds, debentures, and other marketable securities issued by the government or private entities.
Why NBFC Registration is a strong business opportunity
NBFC registration is your gateway to entering India’s booming financial sector. NBFCs are playing an increasingly vital role in India’s financial ecosystem. As of September 2023, NBFCs hold a 41% market share in India's microfinance sector, proving to be a profitable and scalable business model. Unlike traditional banks, NBFCs face fewer compliance restrictions, making them easier to manage while still being regulated under the Companies Act, 2013, and RBI Act, 1934.
To operate smoothly and withstand financial uncertainties, NBFCs must maintain a minimum net worth of INR 10 crores. This acts as a buffer against losses and ensures financial stability.
Getting your NBFC registration is the first step toward establishing a high-growth financial business. With the right guidance, you can secure your NBFC license hassle-free and tap into this lucrative sector.
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Types of NBFCs for NBFC Registration
NBFCs play a vital role in India’s financial system, offering credit, investment, and financial services to individuals and businesses that may not have access to traditional banking. Based on their activities, NBFCs are categorized into different types.
Investment and Credit Company (ICC)
Provide loans, credit, investment services to individuals and businesses, making it easier for them to access funds and grow.
Infrastructure Finance Company (IFC)
Focused on large-scale infrastructure projects, finance highways, power plants, and urban development projects to support national growth.
Core Investment Company (CIC)
Primarily invest in group company securities, holding at least 90% of their assets in such investments, help businesses with capital management.
Infrastructure Debt Fund (IDF-NBFC)
These NBFCs raise funds through bonds to finance long-term infrastructure projects in energy, transportation, and urban development.
Micro-Finance Institution (MFI)
MFIs provide small, collateral-free loans to low-income individuals and small businesses, promoting financial inclusion and entrepreneurship.
Factoring NBFC (Factor)
These NBFCs help businesses improve cash flow by buying their unpaid invoices, turning receivables into instant funds to support operations.
Mortgage Guarantee Company (MGC)
Provide guarantees for home loans, reducing risks for lenders and making homeownership more accessible, especially for first-time buyers.
Peer-to-Peer (P2P) Lending NBFC
Connect borrowers directly with lenders through online platforms, offering an alternative to traditional bank loans with flexible terms.
NBFC Registration Process in India
Starting an NBFC requires proper registration and approval from the Reserve Bank of India (RBI). Here’s a step-by-step guide to the process:
Step 1
Register Your Company
Before applying for an NBFC license, you must first register your company under the Companies Act, 2013. A Certificate of Incorporation (CoI) from the Registrar of Companies is required. Additionally, you must have a paid-up capital of at least INR 10 crore.
Step 2
Prepare a Business Plan
A well-structured 5-year business plan is crucial for NBFC registration. It should clearly define business objectives and model, provide detailed financial projections, include a thorough market analysis, and outline effective risk management strategies to ensure long-term stability and growth.
Step 3
Document Verification
The RBI requires documents from promoters and shareholders to verify capital sources and management eligibility. Experts review these documents to ensure compliance before submission.
Step 4
Submit the NBFC Registration Application
The application for an NBFC license is available on the RBI’s official website. Once filled out, applicants receive an application reference number for tracking.
Step 5
Submit Documents to RBI
After online submission, physical copies of the required documents must be sent to the RBI’s Central Office for verification.
Step 6
RBI Approval & NBFC License Issuance
RBI carefully reviews the application and documents. If everything is in order and meets Section 45-IA of the RBI Act, the NBFC registration certificate is issued within 180 days.
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Eligibility Criteria for NBFC Registration in India
If you’re planning to register an NBFC online, you must meet the eligibility requirements set by the Ministry of Corporate Affairs (MCA) and the Reserve Bank of India (RBI).
Checklist for the NBFC License from RBI
- Maintain minimum net worth of ₹10 crores as Tier 1 capital.
- Capital must be self-funded; borrowed capital not allowed.
- Management team should have at least 10 years of experience in finance.
- Expertise in credit, risk management, and retail finance is essential.
- A strong business plan must be submitted, demonstrating public benefit.
- The RBI grants licenses based on the viability of the business plan.
- Applicants must have a clear credit history, with no defaults by directors or shareholders.
- Any associated or subsidiary companies must have a clean financial record.
- Registration under the Companies Act, 2013 is mandatory.
- The company can be either a private limited or public limited entity.
- Compliance with all RBI regulations is required.
Requirements for Directors & Shareholders for NBFC Registration
- A minimum of two directors and two shareholders is required.
- They should be financially stable and have a clean legal record.
- Must qualify under the Fit and Proper Criteria set by the RBI.
- Should provide transparent proof of the source of funds.
- Foreign individuals and entities can become shareholders.
- Must comply with all RBI guidelines to ensure legitimacy.
Documents Required for NBFC Registration
- KYC – Directors & Shareholders
- Certified Memorandum and Articles of Association
- Confidential Banker’s Report – Directors & Shareholders
- CA certified Net Worth – Directors & Shareholders
- Banker Confirmation – Rs. 10 crores FD in the NBFC's account
- Board-approved Financial Projections
- Professional Background of Directors and Shareholders
- Credit Reports – Directors & Shareholders
- Duly Attested Highest Education Certificate Copy
- CA Certified Capital Structure of the Company
- Board-approved Business Plan
- Board-approved Credit Policy
Functions of an NBFC
Non-Banking Financial Companies (NBFCs) play a vital role in India's financial sector by providing financial services beyond traditional banking. Their primary functions include:
Providing Loans & Credit
NBFCs offer personal loans, business loans, vehicle loans, and microfinance, catering to individuals and businesses.
Asset Financing
They help businesses acquire machinery, equipment, and vehicles through structured financing solutions.
Insurance & Risk Management
Some NBFCs operate as insurance brokers, offering financial protection products.
Wealth & Investment Management
Many NBFCs provide investment advisory services, managing portfolios, stocks, and bonds.
Housing & Infrastructure Financing
They finance real estate projects, affordable housing, and large infrastructure developments.
Microfinance & Financial Inclusion
NBFCs extend credit to small businesses, self-employed individuals, and underserved communities, boosting financial inclusion.
Post Registration Compliance for NBFC
Since 2020, the RBI has introduced various mandatory post-registration compliances for NBFC license certificate, which include the following:
- CIC (Credit Information Companies) Membership
- FIU-IND Registration
- CKYC (CERSAI) Registration
- Compliance with the Fair Practice Code
- Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Training
- Risk Management Policy approved by the Board
- Filing of Returns - DNBS01, DNBS02, DNBS03, DNBS04A, DNBS04B, DNBS06, DNBS10
- Form A Certificate Return Filing
- Fulfilment of Ratios:
- Capital to Risk-weighted Assets Ratio (CRAR)
- Liquidity Coverage Ratio (LCR)
- Leverage
Why Choose Us for Your NBFC Registration?
Expertise You Can Trust
Our team of CAs, CS, and legal professionals ensures a seamless process from start to finish.
Fast & Hassle-Free Process
We streamline the entire registration journey, reducing delays and ensuring quick approvals for your NBFC license.
Proven Track Record of Success
Our experts have helped numerous fintech entrepreneurs secure their NBFC license & stay compliant with RBI regulations.
Pan-India Support
No matter where you are, our services cover all major cities and regions to help you get registered effortlessly.
Minimal Paperwork, Maximum Efficiency
We handle all the complex documentation, so you can focus on building your business without the paperwork stress.
Faster Turnaround Time
We ensure 30% faster approvals compared to standard processing times, so you can launch your NBFC without unnecessary delays.
Round-the-Clock Expert Support
Our dedicated consultants are available 24/7 to guide you through every step of your NBFC journey.
Compliance & Beyond
We don’t just help with registration—we provide end-to-end compliance support, ensuring your NBFC meets RBI regulations year after year.
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Some FAQs That GenZCFO Often Get Asked
An NBFC (Non-Banking Financial Company) provides financial services like loans, asset financing, and investment management but cannot accept public deposits like a bank.
- Minimum net worth of ₹10 crores
- Registered under the Companies Act, 2013
- A well-defined business plan
- Clear credit history of promoters and directors
The RBI typically takes 3 to 6 months for approval, depending on compliance with requirements and document verification.
- Asset quality concerns
- Liquidity crunch
- Regulatory compliance
- Risk management
- Technology adoption
- Asset-liability mismatches
- Funding diversification
- Fierce competition
- Lending (personal & business loans)
- Asset financing
- Microfinance
- Investment in securities
- Infrastructure financing
Yes, foreign investors can invest in NBFCs under FDI guidelines, but approvals may be required for certain categories.
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