Non-Banking Financial Companies (NBFCs) are essential to India's quickly expanding financial sector since they offer financial services outside of traditional banking.
With the increasing demand for credit, investments, and fintech innovations, setting up an NBFC has become an attractive business opportunity. At Vijendra & Co, we specialize in facilitating NBFC Registration Online, offering in-depth expertise and seamless assistance.
An organization formed under the Companies Act of 2013 that offers financial services such as loans, asset financing, investments, leasing, and hire purchase without a complete banking license is known as a Non-Banking Financial Company (NBFC). In contrast to banks, NBFCs are unable to take demand deposits; yet, they might boost economic growth by offering specialized financial services to underserved industries.
Over the last ten years, the NBFC industry in India has experienced strong expansion. As per the RBI, NBFCs contribute nearly 25% to the total financial assets in India. The sector’s total assets stood at over ?54 lakh crore in 2024 and are projected to grow at a CAGR of 11%-13% over the next five years. Factors like financial inclusion initiatives, the rise of digital lending, and regulatory support have contributed significantly to the expansion of NBFCs.
The primary focus of Housing Finance Company (HFC) is the provision of housing loans. Each category requires a specialized approach for NBFC Registration Online.
Registering an NBFC offers several advantages:
Proper NBFC Registration Online ensures the company operates legally while enjoying these benefits.
To register a Non-Banking Financial Company, you must prepare the following documents:
Complete documentation is critical for a smooth NBFC Registration Online process.
The following steps are part of the registration process:
A professional approach ensures timely and hassle-free NBFC Registration Online.
There are severe penalties for breaking RBI guidelines:
Therefore, continuous adherence post NBFC Registration Online is critical for sustainability.
For the majority of NBFC operations, India permits 100% FDI under the automated route, including:
However, FDI compliance includes meeting minimum capitalization norms and adherence to sectoral regulations.
An NBFC license may be revoked by RBI in the following situations:
Hence, continuous compliance post NBFC Registration Online is mandatory to avoid cancellation.
Before commencing business after obtaining the NBFC license:
These steps ensure the NBFC operates within the regulatory framework.
Every NBFC must fulfill annual compliances, such as:
Penalties or even license revocation may result from noncompliance with requirements. The RBI suggests regulating NBFCs using a scale-based approach (RBI2021).
In 2021, RBI introduced a Scale Based Regulatory Framework (SBR) for NBFCs to streamline oversight.
NBFCs are separated into four tiers by the framework:
Each layer has specific compliance, governance, and capital adequacy norms.
The Base Layer includes NBFCs like NBFC-Peer-to-Peer Lending Platform (NBFC-P2P), NBFC-Account Aggregator (NBFC-AA), and smaller NBFCs. These entities are subjected to simplified regulations, with emphasis on governance and risk management practices.
Under the new regulations, the Board of an NBFC must have a minimum number of independent directors. This enhances accountability and ensures that decision-making is aligned with the best interests of stakeholders.
NBFCs, especially those classified under the Middle and Upper Layers, must set up a dedicated Risk Management Committee. This committee is responsible for:
Risk management practices help maintain business stability and regulatory compliance.
Fintech-based NBFCs have become more prevalent as a result of the financial sector's adoption of technology. These businesses use mobile platforms, AI, and data analytics to:
The fintech revolution has opened up new avenues for NBFCs to grow and serve previously untapped markets.
It is mandatory for all companies seeking NBFC status to register with RBI before offering financial services. Vijendra & Co provides complete assistance in NBFC Registration Online, ensuring compliance with all applicable norms and guidelines.
At Vijendra & Co, our expertise in NBFC Registration Online stands unmatched. We bring:
We help aspiring NBFCs realize their potential through our deep understanding of regulatory frameworks and financial sector dynamics.