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A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 2013 engaged in the business of loans and advances, acquisition of  shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property.

NBFC is different from banks as it can not accept  savings and current account deposits and cannot  issue cheques drawn on itself and its depositors do not get a deposit insurance and credit guarantee coverage.


NBFC in India can be basically categorized into:

  1. Deposit accepting NBFCs
  2. Non-deposit accepting NBFCs

NBFCs in India are categorized in 10 forms that are mentioned below:

  • Asset Finance Company (AFC)
  • Loan Company (LC)
  • Infrastructure Finance Company (IFC)
  • Investment Company (IC)
  • Infrastructure Debt Fund: Non- Banking Financial Company (IDF-NBFC)
  • Systemically Important Core Investment Company (CIC-ND-SI)
  • Non-Banking Financial Company-Micro Finance Institution (NBFC-MFI)
  • Non-Banking Financial Company – Factors (NBFC-Factors)
  • Mortgage Guarantee Companies (MGC)
  • Non-Operative Financial Holding Company (NOFHC)


NBFC’s in India are regulated by the Reserve Bank of India (RBI). As per RBI guidelines, an NBFC cannot carry on non-banking financial business if, a) it does not have a certificate of registration from the bank (except for the NBFC’s who are not regulated by the RBI), and b) it does not have Net Owned Funds of Rs. 2 crore.

An NBFC incorporated under the Companies Act, 1956 or Companies Act, 2013 willing to commence a business of non-banking finance should comply with the following RBI guidelines:

  • It must be registered under Section 3 of the Companies Act, 2013 or the Companies Act, 1956
  • It should meet the requirement of minimum of Rs. 2 crore of Net Owned Funds (except for NBFC-MFIs, NBFC-Factors and CIC).


  1. Certificate of Company Incorporation.
  2. Detailed information about the management along with a brochure of the company.
  3. A copy of PAN/Corporate Identity Number (CIN) of the company.
  4. Documents related to the office location/address
  5. Certified copy of the Memorandum of Association (MoA) and Articles of Association (AoA).
  6. List of Directors’ profile duly signed by each director must be attached.
  7. CIBIL/credit reports of the Directors of the Company are required.
  8. A copy of the board resolution which certifies that the company has not carried out or stopped NBFC activity and will not carry any until the registration from RBI is granted.
  9. A board resolution on ‘Fair Practices Code’ is to be passed and a certified copy of the same is to be submitted.
  10. Certificate issued by the statutory auditor stating that the company is not holding the public deposit and does not accept it as well.
  11. Certificate specifying owned funds as on the date of the application from the Statutory Auditor is required.
  12. Information regarding the bank account, balances, loans, credits, etc. is to be furnished.
  13. If applicable, audited balance sheet and profit and loss statement along with the directors and auditors report of the preceding three years has to be submitted.
  14. Self-certified copy of the bank statement and Income Tax Returns is required.
  15. Information detailing the company’s future plan, generally for the next 3 years, along with the projection of balance sheets, cash flow statement and income statement.

The application form and an indicative checklist of the documents required to be submitted along with the application is available at www.rbi.org.in → Site Map → NBFC List → Forms/ Returns.




Step 1: Register the company under the Companies Act 2013 or under Companies Act 1956.
Step 2: Minimum Net Owned Funds of the Company should be Rs. 2 crore or more.
Step 3: There should be atleast 1 director in the company from the same background.
Step 4: Good CIBIL score is required to present in order to register as NBFC.
Step 5: Next, visit RBI’s official website and fill in the application form.
Step 6: Submit all the required documents along with the application form.
Step 7: Once you have submitted the application form, a CARN number will be generated.
Step 8: Send the hard copy of the application to the regional branch of RBI.
Step 9: After the application is checked and verified, the License will be given to the company.

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