Your Roadmap to Acquiring an NBFC License in India

Non-Banking Financial Companies (NBFCs) play a significant role in India\'s financial system by providing credit, asset financing, and wealth management services. Establishing an NBFC requires obtaining a license from the Reserve Bank of India (RBI) and adhering to regulatory guidelines. The licensing process involves multiple stages, including compliance checks, capital requirements, and due diligence. Eligibility Criteria for NBFC Registration The company must be registered as a private or public limited company under the Companies Act, 2013. A minimum Net Owned Fund (NOF) of ₹2 crore (₹5 crore for certain categories) is required. At least one director should have financial sector experience. A well-defined business plan and operational framework must be submitted. Step-by-Step Licensing Process Company Incorporation Register as a Private or Public Limited Company with the Ministry of Corporate Affairs (MCA). Fulfill Capital Requirements Maintain the minimum NOF and deposit it in a scheduled bank. Prepare RBI Application Submit an application online via the COSMOS portal and send a physical copy to the RBI. Background Verification & Due Diligence The RBI examines financial history, sources of funds, and compliance status. Approval & Certificate of Registration Upon successful scrutiny, the RBI grants the Certificate of Registration (CoR). Latest Updates (2024-2025) The RBI now requires stringent KYC norms and cybersecurity frameworks for digital NBFCs. Compliance with scale-based regulations introduced in October 2022 is mandatory. Key Considerations NBFCs cannot accept public deposits unless specifically authorized. Regular financial reporting and compliance with RBI norms are essential. Failure to meet guidelines may result in license cancellation. For a smooth licensing process, engaging professional consultants can help in preparing the documentation and meeting regulatory requirements efficiently.