NBFC Registration in India - An Overview

Are you planning to establish your own NBFC business dealing with personal loans, business loans, hire-purchase, leasing, and digital lending apps? If yes, then you are at the right place. Our experts at Fastzeal will assist you in obtaining NBFC registration in India.

NBFCs with an RBI-approved NBFC license also have the authority to invest in shares, stocks, bonds, debentures, and securities issued by government bodies or other marketable entities.

A Non-Banking Financial Company (NBFC) is incorporated under the Companies Act 2013 and regulated by the Reserve Bank of India (RBI) under the framework of the RBI Act, 1934. As per Section 45-I (c) of the RBI Act, any non-banking entity operating as a financial institution is categorized as an NBFC.

To ensure financial stability and manage risks effectively, NBFCs must maintain a net worth of at least INR 10 crores. Let Fastzeal simplify your NBFC registration process.

What is NBFC Registration?

NBFC registration is the process of obtaining a license from the Reserve Bank of India (RBI) to operate legally within India. Foreign entities intending to enter the Indian financial sector as NBFCs must also obtain this license.

Maintaining a positive net worth of INR 10 crores is a crucial regulatory requirement to ensure the financial health of an NBFC.

Why is NBFC Registration Online Important?

NBFCs in India must adhere to all government regulations, legal compliances, and financial norms. Online NBFC registration simplifies the process, making it more efficient, hassle-free, and time-saving. The key benefits of online NBFC registration include:

• Reduced paperwork
• Improved accuracy in compliance
• Transparency and real-time tracking of application status

Moreover, online registration aligns with the Indian government's Digital India initiative, fostering ease of business and attracting domestic and international investments.

Benefits of NBFC License Registration

1. Legal Recognition

NBFCs with an official license can legally offer financial services, including loans and credit facilities.

2. Efficient Fund Management

NBFCs can invest in money market instruments, manage liquidity, and handle short-term financial needs effectively.

3. Wealth Management Services

NBFCs can engage in stock and share trading, investment portfolio management, and related financial activities.

4. Investment in Large-Scale Projects

NBFCs can finance diverse projects across India, contributing to economic growth and infrastructure development.

5. Technological Advancement

NBFCs operate with modern digital infrastructure, providing seamless financial services compared to traditional banking institutions.

6. Wider Market Reach

With a strong digital presence, NBFCs can cater to a larger customer base across different locations.

7. Enhanced Market Authority

Offering flexible rates, quick approvals, and customized financial solutions helps NBFCs build credibility and market dominance.

8. Government Collaboration

NBFCs can partner with government initiatives to reduce risks and maximize profitability.

Eligibility Criteria for NBFC Registration

To qualify for NBFC registration, applicants must meet the following requirements:

Maintain a minimum net owned fund (NOF) of INR 10 crores as per RBI regulations.

At least one-third of the management team should have 10+ years of experience in banking, credit, or financial operations.

A well-defined business plan focused on public benefits.

A clean credit history with no record of loan defaults.

Registration as a private or public limited company under the Companies Act, 2013.

Activities Not Covered Under NBFC License

NBFCs with an RBI license are restricted from engaging in:

Agricultural operations

Industrial manufacturing

Trading of goods (except securities)

Real estate transactions (excluding financial services)

• Documents Required for NBFC Registration

  Entities applying for NBFC registration must provide the following documents:

  • PAN Card
  • Bank account with a minimum paid-up equity capital of INR 10 crores
  • KYC documents of directors and shareholders
  • Professional background details of directors and shareholders
  • Certified net worth statements from a Chartered Accountant (CA)
  • Banker’s confidential report for shareholders and directors
  • Attested copies of highest educational qualifications of directors
  • Credit reports of directors and shareholders
  • Certified capital structure of the company
  • Memorandum & Articles of Association (MOA & AOA)
  • Business plan and financial projections (approved by the Board)
  • Employment and business experience certificates
  • Bank confirmation of INR 10 crores as a fixed deposit
  • RBI-approved credit policy and business SOP

  
  

NBFC Registration Process in India

Obtaining an NBFC license from RBI involves multiple steps and can take up to 180 working days. A structured approach ensures a smooth process and avoids unnecessary delays.

Step 1: Company Incorporation

Register the company under the Companies Act, 2013, and obtain a Certificate of Incorporation with a paid-up capital of INR 10 crores.

Step 2: Prepare a Business Plan

Develop a comprehensive 5-year business plan, covering objectives, market analysis, financial projections, risk management, and operational structure.

Step 3: Scrutiny Process

Regulatory consultants review the documents of shareholders and promoters to ensure compliance with RBI’s pre-application requirements.

Step 4: Submission of NBFC Application

Applicants must submit the NBFC registration form via the RBI’s official website and obtain an application reference number.

Step 5: Document Submission

All required documents must be submitted physically to RBI’s central office for verification and authentication.

Step 6: Issuance of NBFC Registration Certificate

Upon successful verification, the RBI issues the NBFC license within 180 days, provided all conditions under Section 45-IA are met.

Types of NBFCs in India

NBFCs are categorized based on their ability to accept deposits. The two primary types are:

Type 1 – Deposit-Taking NBFCs (NBFC-D)

• Asset Finance Company (AFC): Provides funding for purchasing equipment, vehicles, and machinery.
• Core Investment Company (CIC): Primarily invests in group companies.
• Housing Finance Company (HFC): Offers loans for home purchases, construction, and renovation.
• Micro Finance Institution (MFI): Provides micro-loans to low-income individuals and small businesses.
• Mutual Benefit Finance Company (MBFC): Operates similarly to cooperative societies, offering loans and accepting deposits.
  
  

Type 2 – Non-Deposit Taking NBFCs (NBFC-ND)

• Infrastructure Debt Fund (IDF-NBFC): Focuses on infrastructure project financing.
• Infrastructure Finance Company (IFC): Invests in large-scale infrastructure projects.
• Investment Company (IC): Provides loans, credit facilities, and investment management services.
• Loan Company: Offers working capital finance and short-term loans.
• Systemically Important Core Investment Company (CIS-ND-SI): Holds assets worth INR 100 crore or more.
  • Such companies are required to deploy 90% of their assets towards debt instruments or loans in group companies.
  • Types of NBFCs by RBI Regulatory Norms for NBFC Registration
  • The layers of the NBFC are categorized as per the scale-based regulatory framework (based on their size, activity, and perceived riskiness). The following is the regulatory structure of the NBFCs by RBI regulatory norms for NBFC registration divided into four different layers.
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  • Base Layer NBFC (NBFC-BL)
  • The base layer NBFCs comprise non-deposit-taking NBFCs below an asset size of Rs.1000 Crores. NBFC Peer-to-Peer lending platforms (NBFC-P2P), NBFC account Aggregators (NBFC-AA), and Non-Operative Financial Holding Companies (NOFHC) are some of the examples of Base layer NBFCs.
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  • Middle Layer (NBFC-ML)
  • The middle layer of NBFCs comprises all deposit-accepting NBFCs (NBFC-D) and non-deposit-accepting NBFCs indulged in carrying out specific business activities.
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  • Upper Layer (NBFC-UL)
  • The upper layer of NBFCs includes the top 10 eligible NBFCs, eligibility identified in terms of assets by the Reserve Bank of India.
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  • Top Layer (NBFC-TL)
  • The top layer of NBFCs usually remains empty. The RBI transfers specific NBFCs from the upper layer to the top layer when potential systematic risk in the upper layer substantially rises.
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Pre-Requisites of NBFC Registration

The role of NBFCs in the Indian financial sector is unprecedented. However, any business that wants to apply for NBFC registration needs to fulfil certain pre-requisite conditions to be eligible to be considered an NBFC. NBFC registration consultants can help your company meet these conditions to avoid delays in the application process. These conditions include:

Pre-Requisites of NBFC Registration

The company should be registered per the Companies Act, 2013 guidelines.

It should own a minimum capital of INR 10 crore (effective 1st October 2022) which should not be borrowed.

It should maintain the minimum capital requirement mandated by the RBI.

1/3rd number of directors associated with the NBFC must have experience in finance.

The company should have a detailed plan ready for the next 5 years.

NBFC Registration - Market Share of NBFCs in India

NBFCs are the driving force behind the sustainable growth of the Indian economy as they assist in meeting the capital requirements of MSMEs and business ventures. As India is on the path to becoming a $7 trillion economy by 2030, NBFCs have a significant role to play. Have a look at the market share of NBFCs in India -

Market Size of NBFCs in India by 2030

The market size of NBFCs in India by 2030 is anticipated to touch the mark of USD 40.35 Billion during the forecast period of 2026-2030.

Expected CAGR for NBFCs in India

The expected CAGR for NBFCs in India is 9.13% for the forecast period of 2026-2030. It’s the fastest-growing segment in the loan market.

NBFCs with a Unicorn Status

Five Star Business Finance, InCred Finance, and OfBusiness are NBFCs that have achieved unicorn status in India.

NBFC Registration Fees in India

NBFC is a fast-growing business in India, registering an annual growth of 20%. NBFC registration fees in the dynamic financial ecosystem depends on different factors.

Fees for NBFC License Certificate

NBFC registration fees include government charges that start from INR 3,50,000.

As NBFC registration consultants, our professional consultation fees for the NBFC license certificate start from INR 6,00,000.

Miscellaneous Charges for NBFC License Registration

Miscellaneous Charges (Travelling and Other Filing Expenses)- INR 50,000 to INR 1,00,000

NBFC Registration Starts from INR 15 Lakh (Inclusive of Govt Fees, Consultation Charges & Miscellaneous Charges)

NBFC and Bank Difference

While both banks and NBFCs share similarities, such as offering various financial services, including loans and credits, they differ in many ways. Let us explore NBFC and bank differences as follows:

How Long Does It Take to Register NBFC in India?

NBFC registration is a long process that takes between 90 to 180 working days to complete. The overall time taken to register NBFC in India is subject to various factors such as application submission, FDI involvement, etc. However, NBFC registration consultants can significantly help you avoid delays by streamlining your documentation for timely application. Summary of time taken by different procedures of the NBFC registration are:

Company Incorporation – 1 to 2 weeks

Permanent Account Number (PAN) and Tax Deduction & Collection Account Number (TAN) – 1 week

Opening the Bank Account – 7 days

Credit Reports for Directors/Shareholders – 1 to 2 weeks

Detailed Business Plan – 2 to 4 weeks

NBFC Application Preparation & Submission – 1 week

First Stage Clearance from the RBI – 7 days

RBI’s Due Diligence & Background Checks – Between 3 to 6 months

Communication to Regional Office about Final Decision – 7 days

Receipt of Certificate of Registration (CoR) – As and when approved

Why Opt for Fastzeal to Secure a NBFC License from RBI?

75% Market Share

Fastzeal is ruling the NBFC registration segment with a healthy market share of 75%, the best in the trade.

10+ Years of Experience

Our NBFC registration consultants have more than 10 years of proven experience in successful NBFC registration.

Saved 20 Lakh+ Hours of Fintechpreneurs

We have saved 20 lakh+ hours of fintechpreneurs by timely completion of NBFC registration for our clients.

Outstanding 99% Success Rate

At Fastzeal, we have maintained an outstanding success rate of 99% in meeting NBFC Compliance needs.

500+ Fintech Entrepreneurs

500+ fintech entrepreneurs secured their NBFC license from RBI with our expert consultants at Fastzeal.

Easy Paperwork

Our Fastzeal experts will ease the paperwork for NBFC registration online in India for you.

5000+ Pin Codes

Our Fastzeal experts guide you in acquiring NBFC license certificates across 5000+ Pin Codes in India.

30% Faster Turnaround Time

With a turnaround time of 30%, we are making a deep impact in the digital lending industry.

24/7 Availability of Dedicated Consultants

Our NBFC registration consultants are available round-the-clock to register NBFC in India and fulfil your dreams.