What is an NBFC?
A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act that engages in financial activities — loans, advances, acquisition of shares/stocks/bonds/debentures — without holding a banking licence. NBFCs are regulated by the Reserve Bank of India under the RBI Act, 1934.
Minimum capital requirements
| NBFC Type | Minimum Net Owned Funds (NOF) |
|---|---|
| NBFC-ICC (Investment & Credit Company) | ₹2 crore |
| NBFC-MFI (Micro Finance Institution) | ₹5 crore (₹7 crore for north-east) |
| NBFC-Factor | ₹5 crore |
| NBFC-IFC (Infrastructure Finance Company) | ₹10 crore |
| NBFC-Account Aggregator | ₹2 crore |
Document checklist
- Certificate of Incorporation + Memorandum & Articles of Association
- PAN, TAN, GST registration of the company
- Audited balance sheet for the most recent financial year
- Net Owned Funds (NOF) certificate from a practicing CA
- CIBIL reports of all directors/shareholders holding >10% equity
- Detailed business plan with 3-year projections
- Information technology & cybersecurity policy
- Compliance & risk management framework
- Know Your Customer (KYC) & Anti-Money Laundering (AML) policy
- Board resolution authorising the NBFC application
Step-by-step process
- Incorporate company — 2 directors minimum, financial services in object clause
- Acquire NOF — Deposit capital, get certificate from CA
- File RBI application — Via COSMOS portal (earlier called SAS)
- RBI evaluation — 90 to 180 days typically
- Grant of Certificate of Registration (CoR) — Issued under Section 45-IA of RBI Act
- Commence business — File commencement of business with ROC within 180 days
Cost breakdown
- Company incorporation: ₹15,000 – ₹25,000
- Capital (NOF): ₹2 crore minimum (your own funds)
- RBI application fee: Nil
- Professional fees (CA/CS/Legal): ₹2–5 lakh
- Technology setup (basic): ₹8–15 lakh
- Compliance & policies documentation: ₹1–2 lakh
Timeline
- Company incorporation: 2 weeks
- Capital arrangement + audit: 2 weeks
- RBI application filing: 1 week
- RBI evaluation: 3–6 months
- CoR issuance: 2 weeks post-approval
Total: 4 to 8 months end-to-end.
Post-registration compliance
Once registered, your NBFC must file:
- Monthly returns (DNBS03, DNBS04A, DNBS04B, DNBS10)
- Quarterly returns (DNBS13, SBR)
- Annual returns (BSR, financial statements)
- Maintenance of minimum 15% CRAR (Capital to Risk-Weighted Assets Ratio)
- Annual on-site RBI inspection
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