NBFC Registration
Setting up an NBFC in India offers a promising opportunity for entrepreneurs aiming to enter the financial services sector without obtaining a full banking license. These companies cater to diverse customer segments by offering personal loans, gold loans, vehicle financing, micro-lending, and more
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Overview of NBFC Registration in India
Setting up an NBFC in India offers a promising opportunity for entrepreneurs aiming to enter the financial services sector without obtaining a full banking license. These companies cater to diverse customer segments by offering personal loans, gold loans, vehicle financing, micro-lending, and more
NBFCs play a vital role in financial inclusion by reaching unbanked and underserved regions where traditional banks may not operate efficiently.
As the demand for alternative financing grows, especially among small businesses and rural borrowers, NBFCs have become a preferred lending channel. However, to operate legally, an NBFC must first be registered and regulated by the RBI.
A Non-Banking Financial Company (NBFC) is a company (registered under the Companies Act) that provides banking-like services, including
By law, an NBFC’s principal business must be financial, for example, lending money or investing in securities, rather than activities like agriculture, industrial production, trading goods or services, or real estate construction.
In other words, it should earn most of its income from financial activities (the 50-50 test) to qualify as an NBFC. The Reserve Bank of India (RBI) regulates NBFCs, and no company can operate as an NBFC without RBI approval.
Eligibility Criteria
Paid-Up Equity Capital refers to the total capital raised by the company.
Free Reserves are the companys unallocated reserves.
Intangible Assets include non-physical assets like goodwill.
Accumulated Losses represent the losses carried forward from previous years.
Director KYC:Verification of identity and background
CIBIL Reports:Credit history checks
Affidavits:Signed declarations confirming no criminal or regulatory violations
CA-Certified Net Worth Certificates:To affirm the financial standing of the directors
Documents Required
Registration Process
Step 1: Incorporate Your Company
Set up a Private Limited or Public Limited Company under the Companies Act, 2013. Ensure the company’s Memorandum of Association includes NBFC-related objects (e.g., “to provide loans and advances, to act as financial consultants, etc.”). The company should have already obtained a valid PAN and be compliant with other corporate formalities.
Step 2: Arrange the Minimum NOF
Deposit a minimum of ₹10 crore in the company’s bank account. Obtain a Net Owned Fund certificate from a Chartered Accountant certifying this balance. This capital must be free (unpledged, liquid) and shown in audited financial statements or bank statements.
Step 3: Prepare a Business Plan
Draft a detailed 5-year business plan outlining your proposed NBFC activities (types of loans/products, target markets, geographic reach) and financial projections. RBI scrutinizes this plan closely, so include market research, risk management policies, projected profit & loss, and capital planning.
Step 4: Apply Online via the RBI’s Portal
From May 1, 2025, NBFC registration must be done through the PRAVAAH portal, which has replaced the earlier COSMOS portal.
Step 5: Submit Physical Documents
After online submission, send the hard copy of the application form along with all supporting documents to RBI’s Central Office (CGM, Dept of Regulation, RBI, Mumbai) by post or courier. This must include signed declarations, board resolutions, notarized affidavits, etc., as per RBI guidelines. Track and confirm delivery of this envelope.
Step 6: RBI Scrutiny and Certificate of Registration
RBI will review your application and documents. If needed, they may seek clarification or additional documents. Upon satisfactory scrutiny, the RBI will issue a Certificate of Registration (CoR) to the company. This CoR is the official NBFC license. Only after receiving the CoR can the company legally commence NBFC operations.
Fees & Charges
| Fee Component | Amount |
|---|---|
| Government Fees and RBI ChargesCompany Incorporation Fees:The fee (and stamp duty) paid to the Ministry of Corporate Affairs for company registration (approx. ₹10,000–₹20,000 depending on authorised capital and professional service).RBI Application Fee:A non-refundable fee of ₹300,000 (₹3 lakh) is required when submitting the NBFC registration application via the Pravaah portal.Other Statutory Fees:There may be minimal fees (hundreds of rupees) for notarized declarations, stamp paper affidavits, etc., required by the RBI. | Contact for pricing |
| Company Incorporation Fees:The fee (and stamp duty) paid to the Ministry of Corporate Affairs for company registration (approx. ₹10,000–₹20,000 depending on authorised capital and professional service). | Contact for pricing |
| RBI Application Fee:A non-refundable fee of ₹300,000 (₹3 lakh) is required when submitting the NBFC registration application via the Pravaah portal. | Contact for pricing |
| Other Statutory Fees:There may be minimal fees (hundreds of rupees) for notarized declarations, stamp paper affidavits, etc., required by the RBI. | Contact for pricing |
| Consultant or Service Fees | Contact for pricing |
| Other Potential ExpensesOffice Setup:RBI expects NBFCs (especially deposit-taking and systemically important ones) to have a properly registered office. Rent/office setup costs can be significant if you don’t already have space.Audit Fees:Budget for auditing costs (to issue the NOF certificate and future mandatory audits).Compliance Systems:NBFCs often invest in basic compliance software (for KYC, accounting, etc.) before launch.Marketing/Branding:A logo, website, brochures, etc., if you’re starting a financial firm. | Contact for pricing |
| Office Setup:RBI expects NBFCs (especially deposit-taking and systemically important ones) to have a properly registered office. Rent/office setup costs can be significant if you don’t already have space. | Contact for pricing |
| Audit Fees:Budget for auditing costs (to issue the NOF certificate and future mandatory audits). | Contact for pricing |
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