NBFC Registration & RBI Compliance

How It Works

1. 1

   Entity Incorporation and Capital Infusion

   Incorporate a private or public limited company under the Companies Act, 2013 with an appropriate objects clause that covers the intended financial activities. Infuse the minimum net owned fund — rupees ten crores for most NBFC-ICC categories — and obtain a statutory auditor certificate confirming the net owned fund position.

2. 2

   Promoter Due Diligence and Business Plan Preparation

   Compile KYC, source of funds, credit bureau, and professional background documentation for all directors and promoters. Prepare a detailed business plan covering the proposed financial product, target segment, risk management framework, credit assessment methodology, and five-year financial projections. The RBI evaluates the quality of this plan critically.

3. 3

   Application Submission on Cosmos Portal

   Register on the RBI Cosmos portal and file the NBFC registration application along with all supporting documents. Pay the prescribed application fee online. The Department of Regulation of the Reserve Bank of India will assign an application number and commence scrutiny.

4. 4

   RBI Scrutiny and Query Resolution

   The RBI may raise queries regarding the business plan, promoter background, capitalization source, or governance framework. All responses must be submitted within the stipulated period. The RBI may also conduct a personal interaction with the promoters or principal officer. Inadequate responses at this stage are the most common cause of application rejection.

5. 5

   In-Principle Approval and Infrastructure Setup

   Upon satisfaction, the RBI issues an in-principle approval. The applicant must then operationalize the registered office, technology infrastructure, credit appraisal systems, and compliance framework within the period specified in the in-principle approval, typically three to six months.

6. 6

   Certificate of Registration Issuance and Compliance Calendar Activation

   The RBI inspects or reviews evidence of infrastructure readiness and issues the Certificate of Registration. From this date, the NBFC must activate its compliance calendar, including quarterly NBS returns, annual auditor certificates, and asset classification reviews, ensuring no default occurs in the very first compliance cycle.