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NBFC Compliance

NBFC Compliance

Complete compliance services for Non-Banking Financial Companies - RBI regulations, ROC filings, and income tax compliance

₹25,000₹50,00050% OFF
  • RBI Annual Compliance
  • ROC Annual Filings
  • Income Tax Return (ITR-6)
  • Statutory Audit Support
  • CRAR & NPA Reporting
  • Compliance Calendar

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8 REASONS FOR NBFC
COMPLIANCE

🏦

RBI Regulation

Mandatory compliance under RBI regulations for all NBFCs

⚖️

Legal Requirement

Required under Companies Act and RBI Act

💰

Avoid Penalties

Non-compliance attracts heavy penalties and license cancellation

🛡️

License Retention

Maintain NBFC license and certificate of registration

📊

Financial Health

Ensures financial stability and prudential norms compliance

🤝

Customer Trust

Compliance builds trust with customers and stakeholders

✅

Operational Smooth

Smooth operations without regulatory interruptions

📈

Business Growth

Compliance enables smooth business expansion

What is NBFC Compliance?

A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 2013 and engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities, leasing, hire-purchase, insurance business, chit business, but does not include any institution whose principal business is agriculture, industrial activity, purchase or sale of any goods or providing any services.

NBFC compliance involves dual compliance - with RBI regulations as well as Companies Act provisions. NBFCs must maintain minimum Net Owned Funds (NOF) of ₹2 crore (for new NBFCs from April 21, 2021, it's ₹10 crore), maintain Capital to Risk-Weighted Assets Ratio (CRAR) of 15%, file quarterly and annual returns with RBI, file annual returns with ROC, get accounts audited by statutory auditors, file income tax returns, and comply with all prudential norms prescribed by RBI.

Timely compliance is crucial as NBFCs are highly regulated entities. Non-compliance can lead to heavy penalties, cancellation of Certificate of Registration (CoR), inability to accept deposits, restrictions on lending activities, and even winding up proceedings. NBFCs must also comply with KYC/AML guidelines, fair practices code, and customer grievance redressal mechanisms.

RBI + MCA
Dual Compliance
15% CRAR
Minimum Required
₹10 Cr
Minimum NOF (New)

Why Annual Compliance Check-up is Needed

📜

Maintain License with RBI

To keep the Certificate of Registration (CoR) valid and active with RBI

💰

Avoid Penalties

RBI and MCA impose heavy penalties for non-compliance, including license cancellation

📊

Financial Prudence

Ensure financial stability by maintaining CRAR, NOF, and other prudential norms

📝

Regulatory Reporting

Timely submission of quarterly and annual returns to RBI and ROC

🛡️

Customer Protection

Comply with fair practices code and customer grievance redressal mechanisms

✅

Business Continuity

Ensure smooth operations without regulatory interruptions or restrictions

Annual Compliance Requirements

RBI Compliance:

NBS-1

Statement of Capital Funds, Risk Assets/Exposures and Risk Asset Ratio

Frequency:Half-yearly
Deadline:Within 15 days of half year end
NBS-2

Statement of Financial Position

Frequency:Quarterly
Deadline:Within 30 days of quarter end
NBS-3

Prudential Norms on Income Recognition, Asset Classification and Provisioning

Frequency:Half-yearly
Deadline:Within 30 days of half year end
NBS-4

Statement of Investments

Frequency:Half-yearly
Deadline:Within 30 days of half year end
NBS-5

Statement of Frauds

Frequency:Half-yearly
Deadline:Within 30 days of half year end
NBS-6

Concentration of Deposits

Frequency:Half-yearly
Deadline:Within 30 days of half year end
NBS-7

Maturity Pattern of Deposits

Frequency:Half-yearly
Deadline:Within 30 days of half year end
NBS-8

Concentration of Advances and Exposures

Frequency:Half-yearly
Deadline:Within 30 days of half year end
NBS-9

Maturity Pattern of Assets and Liabilities

Frequency:Half-yearly
Deadline:Within 30 days of half year end
ALM Return

Asset Liability Management Return

Frequency:Monthly
Deadline:Within 30 days of month end

ROC/MCA Compliance:

AOC-4

Financial Statements Filing

Deadline:Within 30 days of AGM
Penalty:₹100/day (max ₹5 lakhs)
MGT-7

Annual Return Filing

Deadline:Within 60 days of AGM
Penalty:₹100/day (max ₹3 lakhs)
ADT-1

Auditor Appointment

Deadline:Within 15 days of AGM
Penalty:₹300/day
DIR-3 KYC

Director KYC

Deadline:Before 30th September
Penalty:₹5,000 + DIN deactivation
AGM

Annual General Meeting

Deadline:Within 6 months of FY end
Penalty:₹1 lakh + ₹5,000 per director
Board Meetings

Minimum 4 Meetings

Deadline:Quarterly (max 120 days gap)
Penalty:₹25,000 to each director

Income Tax Compliance:

ITR-6

Income Tax Return for Companies

Annual income tax return with audit report

Deadline:30th September
Form 3CD

Tax Audit Report

Statutory audit report by CA for income tax

Deadline:30th September
TDS Returns

Quarterly TDS Returns

TDS deducted on interest, salaries, and other payments

Deadline:31st July / Oct / Jan / May
Advance Tax

Quarterly Advance Tax Payment

Advance tax payment in four installments

Deadline:15th June / Sept / Dec / 15th March

Prudential Norms for NBFCs

💰

Capital Adequacy (CRAR)

Minimum 15%

Capital to Risk-Weighted Assets Ratio must be maintained at 15% or above

📊

Net Owned Funds (NOF)

Minimum ₹10 Crore (New) / ₹2 Crore (Existing)

Minimum Net Owned Funds to be maintained at all times

🏷️

Asset Classification

Standard / Sub-standard / Doubtful / Loss

Assets must be classified based on RBI norms for provisioning

💵

Income Recognition

As per RBI Guidelines

Income to be recognized only when realized, not accrued

📉

Provisioning for NPAs

As per Asset Classification

Adequate provisions must be made for Non-Performing Assets

⚖️

Asset Liability Management

Monthly ALM Return

Proper management of maturity pattern of assets and liabilities

🎯

Concentration of Credit

Single Borrower Limit

Maximum 15% of owned funds to single borrower, 25% to group

📜

Fair Practices Code

Mandatory Compliance

Adoption and display of fair practices code for transparency

Types of NBFCs

🚗

Asset Finance Company (AFC)

Finances physical assets supporting productive/economic activity like automobiles, tractors, etc.

📈

Investment Company (IC)

Acquires securities with principal business of acquisition of shares, bonds, etc.

💳

Loan Company (LC)

Provides finance by making loans and advances for any activity other than own

🏗️

Infrastructure Finance Company (IFC)

Deploys 75% of total assets in infrastructure loans with minimum 5 years tenure

🏢

Systemically Important Core Investment Company (CIC-ND-SI)

Holds not less than 90% of net assets in equity shares, preference shares of group companies

🌉

Infrastructure Debt Fund (IDF)

Raises resources through issue of Rupee or Dollar denominated bonds for infrastructure financing

👥

NBFC-Micro Finance Institution (NBFC-MFI)

Financial institution with at least 85% of assets as qualifying assets (microfinance loans)

📊

NBFC-Factor

Engaged in principal business of factoring with financial assets in factoring business ≥ 50%

🏠

Mortgage Guarantee Companies (MGC)

Provides mortgage guarantee for housing loans provided by banks and housing finance companies

Our NBFC Compliance Services

1

RBI Returns Filing

Complete filing of all RBI returns (NBS-1 to NBS-9, ALM, etc.)

2

ROC Annual Filings

AOC-4, MGT-7, and all annual filings with MCA

3

Income Tax Compliance

ITR-6 filing, TDS returns, and advance tax payments

4

CRAR Calculation

Capital to Risk-Weighted Assets Ratio computation and maintenance

5

NPA Management

Asset classification, provisioning, and NPA reporting

6

ALM Compliance

Asset Liability Management and monthly return filing

7

Statutory Audit

Coordination with statutory auditors for annual audit

8

Board & AGM Support

Complete board meeting and AGM conduct with minutes

9

Fair Practices Code

Implementation and compliance with fair practices code

10

Compliance Calendar

Personalized calendar with all RBI and MCA due dates

Documents Required

1Company Documents

  • ✓ Certificate of Incorporation
  • ✓ RBI Certificate of Registration (CoR)
  • ✓ MOA & AOA
  • ✓ PAN & TAN of Company
  • ✓ Previous Financial Statements

2Financial Records

  • ✓ Books of Accounts
  • ✓ Loan Portfolio Details
  • ✓ Deposit Details (if applicable)
  • ✓ Investment Portfolio
  • ✓ Bank Statements (All accounts)

3Regulatory Records

  • ✓ Previous RBI Returns Filed
  • ✓ CRAR Calculations
  • ✓ NPA Classification Records
  • ✓ ALM Statements
  • ✓ Asset Classification Register

4Director Details

  • ✓ PAN & Aadhaar of Directors
  • ✓ DIN (Director Identification Number)
  • ✓ DSC (Digital Signature Certificate)
  • ✓ Address Proofs
  • ✓ Board Meeting Minutes

Important Note:

NBFCs must maintain detailed records of all financial transactions, loan portfolios, deposits, investments, and regulatory filings. Proper documentation is essential for RBI inspections and maintaining compliance.

NBFC Compliance Process

Complete annual compliance in systematic steps

1

Books

Finalize Accounts

2

CRAR

Calculate Ratios

3

NPA

Classify Assets

4

Audit

Statutory Audit

5

RBI

File RBI Returns

6

ROC

File with ROC

7

ITR

File Income Tax

Year-round Activity
Average Time to Complete

Frequently Asked Questions

Q1.What is NBFC and how is it different from banks?
NBFC (Non-Banking Financial Company) is a company registered under Companies Act, 2013 and engaged in financial activities like loans, advances, acquisition of securities, leasing, hire-purchase, etc. Key differences from banks: (1) NBFCs cannot accept demand deposits (withdrawable by cheque), (2) NBFCs are not part of payment and settlement system, (3) NBFCs cannot issue cheques drawn on itself, (4) Deposit insurance facility of DICGC not available for NBFC depositors, (5) NBFCs have more flexibility in operations, (6) NBFCs regulated by RBI but not under Banking Regulation Act, (7) NBFCs can focus on specific segments like asset finance, microfinance, infrastructure, etc.
Q2.What is the minimum Net Owned Funds (NOF) required for NBFC?
NOF requirements: (1) For new NBFCs registered on or after April 21, 2021: Minimum ₹10 crore NOF required, (2) For existing NBFCs registered before April 21, 2021: Minimum ₹2 crore NOF continues, (3) NOF = Paid-up equity capital + Free reserves - Accumulated losses - Deferred revenue expenditure - Intangible assets, (4) NOF must be maintained at all times during the year, (5) If NOF falls below minimum, RBI may cancel Certificate of Registration, (6) Different NOF requirements for specific NBFCs like Infrastructure Finance Companies (₹300 crore). NOF is calculated as per RBI directions and must be certified by auditors.
Q3.What is CRAR and how is it calculated for NBFCs?
CRAR (Capital to Risk-Weighted Assets Ratio) is the ratio of capital to risk-weighted assets. Calculation: CRAR = (Tier I Capital + Tier II Capital) / Risk Weighted Assets × 100. Minimum CRAR: 15% (including minimum 10% Tier I capital). Tier I Capital: Paid-up equity capital + Free reserves + Capital reserves - Intangible assets - Accumulated losses. Tier II Capital: Preference shares, revaluation reserves, hybrid debt instruments, subordinated debt (subject to limits). Risk Weighted Assets: Assets assigned risk weights (0%, 20%, 50%, 75%, 100%, 125%) based on risk. CRAR ensures NBFCs maintain adequate capital buffer against risks. Non-maintenance can lead to RBI action including restrictions on business.
Q4.What are the asset classification norms for NBFCs?
NBFCs must classify assets as: (1) Standard Assets: Regular repayment, no default, (2) Sub-standard Assets: Overdue for more than 90 days, (3) Doubtful Assets: Overdue for more than 12 months, (4) Loss Assets: Identified as loss by auditors/RBI but not written off. Provisioning requirements: Standard - 0.25% to 2%, Sub-standard - 10% to 25%, Doubtful - 25% to 100%, Loss - 100%. For secured assets, provisioning is on net of security realization. Asset classification must be done as per RBI directions and reported in NBS-3. Non-compliance can lead to penalties and restrictions. Proper asset classification ensures financial health and customer protection.
Q5.What returns need to be filed with RBI?
RBI returns for NBFCs: Monthly: ALM Return (Asset Liability Management). Quarterly: NBS-2 (Statement of Financial Position). Half-yearly: NBS-1 (CRAR), NBS-3 (Asset Classification & Provisioning), NBS-4 (Investments), NBS-5 (Frauds), NBS-6 (Concentration of Deposits), NBS-7 (Maturity of Deposits), NBS-8 (Concentration of Advances), NBS-9 (Maturity of Assets & Liabilities). Annual: Audited Balance Sheet and P&L with Annual Performance Report. All returns must be filed online through COSMOS (Compliance Monitoring Solution) portal. Late filing attracts penalties and adverse RBI action.
Q6.Can NBFCs accept deposits from public?
Deposit acceptance depends on NBFC type: (1) Deposit-taking NBFCs (NBFCs-D): Can accept public deposits subject to RBI directions, (2) Non-Deposit taking NBFCs (NBFCs-ND): Cannot accept public deposits. Requirements for deposit acceptance: (1) Minimum investment grade credit rating, (2) NOF of ₹2 crore, (3) CRAR of 15%, (4) Compliance with all prudential norms, (5) Maximum ceiling on deposits based on NOF and credit rating, (6) Deposit insurance not available. Most NBFCs are now NBFCs-ND and rely on bank borrowings, NCDs, CPs for funding. Accepting deposits without RBI permission can lead to prosecution and cancellation of CoR.
Q7.What is the penalty for non-compliance with RBI regulations?
Penalties for non-compliance: (1) Late filing of returns: ₹5,000 per day of delay (can go up to ₹25,000 per day), (2) Non-maintenance of CRAR: Restrictions on business, higher provisioning, penalty, (3) Non-compliance with prudential norms: Penalties as per RBI Act Section 58B (up to ₹5 lakh per violation), (4) Violation of deposit acceptance norms: Penalty + prosecution, (5) Non-compliance with fair practices code: Penalties and adverse action, (6) Serious violations: Cancellation of Certificate of Registration (CoR). Besides monetary penalties, RBI can impose: (a) Restrictions on lending/acceptance of deposits, (b) Appointment of observer on board, (c) Supersession of board, (d) Directions for merger/winding up. Compliance is crucial for NBFC survival.
Q8.What is Fair Practices Code for NBFCs?
Fair Practices Code ensures transparency and fairness in NBFC operations. Key requirements: (1) Loan application to clearly state interest rate, processing fees, and charges, (2) Loan sanction letter with all terms and conditions, (3) Interest rates to be disclosed in annual percentage rate (APR), (4) No discrimination based on gender, caste, religion, (5) Privacy of customer information, (6) Proper procedure for collection of dues - no harassment, (7) Grievance redressal mechanism with designated officer, (8) Display of fair practices code on website and branches, (9) Adherence to code of conduct for recovery agents, (10) Transparent policy for loan pricing. RBI can impose penalties for non-compliance. Fair practices code protects customers and ensures ethical business practices.
Q9.Do NBFCs need to follow KYC/AML guidelines?
Yes, NBFCs must comply with KYC/AML guidelines: (1) Customer identification and verification as per RBI master directions, (2) Officially valid documents for KYC (PAN, Aadhaar, Passport, etc.), (3) Risk profiling of customers (low, medium, high risk), (4) Enhanced due diligence for high-risk customers, (5) PEP (Politically Exposed Persons) identification and monitoring, (6) Suspicious transaction reporting to FIU-IND, (7) Cash transaction reporting (CTR) for transactions above ₹10 lakh, (8) Record keeping for minimum 5 years, (9) Appointment of Principal Officer for AML compliance, (10) KYC/AML training to staff. Non-compliance can lead to heavy penalties under PMLA (Prevention of Money Laundering Act) and RBI regulations. KYC/AML compliance is mandatory for all NBFCs.
Q10.How to obtain Certificate of Registration (CoR) from RBI for NBFC?
Process to obtain CoR: (1) Incorporate company under Companies Act, (2) Ensure minimum NOF of ₹10 crore (for new NBFCs), (3) Ensure no person holding 10% or more has been convicted or charge-sheeted, (4) Directors should be fit and proper, (5) Apply to RBI in prescribed format with required documents, (6) Documents required: (a) Board resolution, (b) Financial projections, (c) Business plan, (d) Net Owned Funds certificate, (e) Audited financials (if existing), (f) MOA/AOA, (g) Director declarations, (7) RBI scrutiny and inspection, (8) RBI grants CoR if satisfied. Process takes 4-6 months. CoR is mandatory to commence NBFC business. Operating without CoR is illegal and attracts prosecution under RBI Act.

Why Choose Our NBFC Services?

🏦

NBFC Expertise

Specialized knowledge of RBI regulations and NBFC compliance

📋

Dual Compliance

Complete RBI and MCA compliance under one roof

⏰

Timely Filings

Never miss RBI or ROC deadlines - avoid penalties

💰

CRAR Management

Expert calculation and maintenance of capital ratios

📊

NPA Management

Proper asset classification and provisioning

🔍

Audit Support

Complete coordination with statutory auditors

🛡️

License Protection

Ensure your Certificate of Registration remains valid

💼

Regulatory Support

Assistance in RBI inspections and queries

✅

Peace of Mind

Focus on lending while we handle all compliance

Maintain Your NBFC Compliance Effortlessly

Focus on growing your lending business while we handle all RBI and MCA compliance

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