NBFC Registration

Establish a Regulated Financial Business with the Right Legal and Regulatory Foundation

An NBFC (Non-Banking Financial Company) is a company engaged in specified financial activities such as providing loans and advances, financing assets, investment in securities and other activities regulated by the Reserve Bank of India (RBI).

Businesses planning to operate as an NBFC in India must assess the applicable RBI registration requirements, meet the prescribed Net Owned Fund (NOF) criteria and obtain a Certificate of Registration (CoR), wherever required, before commencing the regulated business.

Remind Legal assists businesses with company incorporation, preliminary regulatory assessment, documentation and guidance for NBFC registration with the RBI.

What Makes NBFC Registration Challenging?

NBFC registration involves both company-law requirements and RBI regulatory scrutiny. The proposed business must fall within the definition of a non-banking financial institution, satisfy the applicable principal business criteria and meet the financial and governance requirements prescribed for its category.

Choosing the wrong NBFC category, maintaining insufficient Net Owned Fund or submitting incomplete financial and business documents may affect the application. Businesses must also understand whether an RBI registration exemption applies to their proposed activities.

Get NBFC Registration Assistance

Avoid documentation errors and understand the RBI requirements applicable to your proposed financial business. Remind Legal can assist with preliminary eligibility assessment, incorporation documentation, regulatory document preparation and NBFC application support.

Quick Facts

Note: The minimum Net Owned Fund, eligibility conditions and regulatory requirements vary according to the NBFC category and applicable RBI directions.

What Is an NBFC?

A Non-Banking Financial Company is a company engaged in financial activities such as loans and advances, acquisition of securities, leasing, hire-purchase and other financial activities specified under the Reserve Bank of India Act, 1934.

Unlike banks, NBFCs do not have the same banking permissions. For example, NBFCs generally cannot accept demand deposits or issue cheques drawn on themselves.

Under Section 45-IA of the RBI Act, 1934, an NBFC covered by the registration requirement cannot commence or carry on the business of a non-banking financial institution without obtaining the prescribed Certificate of Registration from the RBI and meeting the applicable Net Owned Fund requirement.

Who Needs NBFC Registration in India?

A business may require the NBFC registration if its principal business involves regulated financial activities and it falls within the definition of an NBFC under the RBI Act.

NBFC registration may be relevant for businesses planning to undertake: -

• Loan and advance financing.
• Asset financing and equipment financing.
• Investment in shares, bonds and other securities as a principal business.
• Microfinance activities.
• Factoring and receivables financing.
• Peer-to-peer lending through a regulated platform.
• Account aggregation services.
• Infrastructure financing.

The requirement depends on the nature of the activity, the applicable principal business criteria and the regulatory category. Not every company providing loans or financial services automatically qualifies as an NBFC.

What Are the Eligibility Requirements for NBFC Registration?

A proposed NBFC must satisfy the applicable statutory and RBI requirements. The key considerations generally include: -

• Company Incorporation: The applicant must be incorporated as a company under the applicable Companies Act.
• Principal Business Criteria: The financial assets of the company must exceed 50% of its total assets (net of intangible assets) and income from financial assets must exceed 50% of its gross income. Both conditions must be satisfied.
• Net Owned Fund: The company must meet the minimum NOF prescribed for its proposed NBFC category.
• Management and Governance: The directors and management must satisfy the applicable fit-and-proper and governance requirements.
• Business Plan: The applicant should have a clear business plan outlining its proposed financial activities, funding arrangements and operational model.
• Regulatory Compliance: The company must demonstrate its ability to comply with the RBI's applicable directions and reporting requirements.

The principal business criteria are commonly referred to as the 50-50 test.

What Is the Minimum Net Owned Fund Required for NBFC Registration?

The Net Owned Fund requirement varies according to the category of NBFC. Under the RBI's registration directions updated in 2026, the prescribed requirements include: -

These amounts are category-specific. Certain specialised NBFCs, including Housing Finance Companies and Core Investment Companies, are governed by separate requirements. Registration exemptions and transitional provisions may also apply in the specified circumstances. Confirm and verify the applicable category and various NOF requirements before filing. 

What Are the Types of NBFCs in India?

The RBI regulates different categories of NBFCs based on their principal activities.

Each category may have distinct registration conditions, capital requirements and regulatory obligations. The proposed business model should be assessed before deciding the category for which registration is required.

What Documents Are Required for NBFC Registration?

The RBI requires the applicant to submit prescribed information and various supporting documents. The exact and accurate checklist depends on the proposed NBFC category and business activities.

Commonly required documents include: -

• Certificate of Incorporation and constitutional documents of the company.
• PAN and registered office details.
• Details of directors, shareholders and key managerial personnel.
• Identity and address proofs of directors and promoters.
• Board resolutions approving the NBFC registration application.
• Audited financial statements, where applicable.
• Details and evidence of Net Owned Fund.
• Bank statements and capital contribution details.
• Business plan and projected financial statements.
• Details of the proposed lending or investment activities.
• Information regarding the source of funds and shareholding pattern.
• Prescribed declarations, undertakings and regulatory disclosures.

The RBI also publishes category-specific document checklists for NBFC registration. The applicant should use the checklist applicable to its proposed category rather than relying on a general document list.

What Is the Process for NBFC Registration?

The NBFC registration process generally involves the following steps, from company incorporation and capital assessment to obtaining RBI approval: -

• Company Incorporation: Incorporate a company under the Companies Act, 2013, if the proposed applicant is not already incorporated.
• Determine NBFC Category: Assess the proposed financial activities and identify the appropriate and suitable NBFC category.
• Assess Net Owned Fund: Verify that the company meets the minimum NOF requirement applicable to the selected category.
• Prepare Business Plan: Prepare the business model, financial projections, funding details and operational framework.
• Compile Documents: Arrange the incorporation records, financial statements, director details, declarations and other supporting documents.
• Submit RBI Application: File the prescribed application and supporting documents through the RBI's PRAVAAH portal, as applicable.
• RBI Examination: The RBI reviews the application and may seek additional information, clarification or supporting documents.
• Obtain Certificate of Registration: If the RBI is satisfied that the applicable conditions are fulfilled, it may grant the Certificate of Registration.

A company should not commence activities requiring NBFC registration merely because it has been incorporated or has submitted an application to the RBI.

What Are the Government Fees and Professional Charges?

The overall cost of NBFC registration depends on the nature of the proposed business, company incorporation requirements, applicable regulatory category and professional assistance required.

Potential expenses may include: -

• Company incorporation charges, if a new company is being established.
• Digital Signature Certificates.
• Applicable statutory and filing charges.
• Legal and professional fees for documentation and application support.
• Expenses relating to financial, accounting and compliance preparation.

The applicable RBI filing requirements and any fees should be verified for the relevant application category before submission.

How Much Time Does NBFC Registration Take?

The time required for NBFC registration depends on the completeness of the application, the proposed business model, financial eligibility, category-specific requirements and RBI scrutiny.

The RBI may request additional documents or clarifications during examination. Therefore, an exact approval timeline should not be assumed. Applicants should ensure that their financial records, business plan and supporting documents are ready before filing. 

What Is the Validity of an NBFC Registration Certificate?

An RBI Certificate of Registration does not generally require periodic renewal. However, the NBFC must continue to satisfy the applicable regulatory conditions and maintain compliance with RBI directions.

The RBI may take regulatory action, including cancellation of the Certificate of Registration, in circumstances specified under the RBI Act, 1934. Therefore, obtaining registration is only the first stage of operating an NBFC.

Are There Any Exemptions from NBFC Registration?

Certain financial institutions and entities may be exempt from RBI registration or may be regulated under a separate statutory framework.

For example, specified entities regulated by SEBI, insurance companies regulated by IRDAI and certain other notified institutions may fall within applicable exemptions.

Further, the RBI's registration framework provides the specific treatment for certain NBFCs based on whether they access public funds or have the customer interfaces. These exemptions are subject to the various prescribed conditions and should not be assumed merely because a company does not accept the deposits.

A business should obtain a regulatory assessment before commencing financial activities without an RBI Certificate of Registration.

What Are the Post-Registration Compliance Requirements?

After obtaining the Certificate of Registration, an NBFC must comply with the RBI Act, applicable RBI directions and other relevant laws.

Depending on its category and scale of operations, the company may need to: -

• Maintain the prescribed Net Owned Fund.
• Follow applicable capital adequacy and prudential norms.
• Submit regulatory returns and periodic statements to the RBI.
• Maintain proper books of account and financial records.
• Conduct statutory audits and other applicable audits.
• Follow fair practices and applicable customer protection requirements.
• Comply with KYC and anti-money laundering requirements, where applicable.
• Maintain corporate governance standards and statutory records.
• Comply with applicable provisions relating to deposits, if authorised to accept public deposits.

The exact compliance framework depends on the NBFC's category, regulatory layer and business activities.

Common Mistakes to Avoid During NBFC Registration

Applicants should take care to avoid the following mistakes: -

• Selecting an NBFC category without assessing the proposed financial activities.
• Failing to meet the prescribed Net Owned Fund requirement.
• Miscalculating the principal business criteria.
• Providing incomplete financial statements or source-of-funds information.
• Submitting an unclear or inadequate business plan.
• Overlooking the fit-and-proper requirements for directors and management.
• Assuming that company incorporation alone permits NBFC operations.
• Ignoring regulatory obligations after receiving the Certificate of Registration.

Why Choose Remind Legal

NBFC registration requires careful assessment of the business model, financial eligibility and regulatory documentation. Remind Legal can assist with: -

• Preliminary NBFC eligibility assessment.
• Guidance on the applicable NBFC category.
• Assistance with company incorporation requirements.
• Review of Net Owned Fund and supporting financial documents.
• Preparation and review of regulatory documentation.
• Assistance with RBI application filing.
• Guidance on applicable post-registration compliance requirements.

What Information Do We Need to Start?

To assess the registration requirements, the proposed applicants may need to provide: -

• Details of the proposed financial activities.
• Company incorporation documents, if already incorporated.
• Details of promoters, shareholders and directors.
• Proposed shareholding pattern and capital structure.
• Financial statements and Net Owned Fund details, where available.
• Proposed business plan and financial projections.
• Information about funding sources and operational arrangements.

Get Started with NBFC Registration

Planning to establish a Non-Banking Financial Company in India?

A preliminary assessment can help you understand the applicable RBI category, Net Owned Fund requirements, documentation and regulatory procedure before submitting an application.

Get NBFC Registration Assistance from Remind Legal for eligibility assessment, regulatory documentation and RBI application support.

Legal Disclaimer

The information provided on this page is for general awareness and does not constitute any legal or financial advice. NBFC registration requirements basically depend on the proposed business activities, regulatory category and various applicable RBI directions. Registration is subject to the RBI scrutiny and approval. Professional assessment is recommended before commencing any regulated financial activity.