Starting a Non-Banking Financial Company (NBFC) in India is an ambitious and rewarding venture. However, the process involves more than just registering a business—it requires regulatory approval, financial discipline, and compliance with guidelines set by the Reserve Bank of India (RBI).
If you’re planning to register NBFC online, you’ll first need to incorporate your company through the Ministry of Corporate Affairs (MCA) using the SPICe+ form. Then, you must apply to the RBI for the Certificate of Registration (CoR). This guide walks you through the entire journey step by step—right from the SPICe+ incorporation to securing your NBFC CoR.
Let’s break it down clearly.
Step 1: Understanding What an NBFC Is
Before diving into registration, it’s important to understand what qualifies as an NBFC.
An NBFC is a financial institution that provides services similar to banks but doesn’t hold a banking license. These services may include:
- Loan and credit facilities
- Asset financing
- Investment in securities
- Microfinance services
- Leasing and hire-purchase
NBFCs are regulated by the RBI and must obtain a valid Certificate of Registration before starting operations.
Step 2: Incorporating the Company Using SPICe+
To begin your NBFC journey, the first step is to set up a legal business entity, typically a private or public limited company, through the MCA’s SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) platform.
Requirements:
- Minimum net owned fund (NOF) of ₹2 crore (to be brought in after incorporation)
- Minimum two directors (at least one must be a resident in India)
- Clean credit and financial background of promoters/directors
Documents Needed:
- PAN and Aadhaar of directors
- Address proof
- Utility bill for office location
- Digital Signature Certificates (DSC)
- Memorandum and Articles of Association (MoA & AoA)
After submitting the SPICe+ form and receiving approval from the MCA, you will be issued a Certificate of Incorporation (COI). This makes your company a legal entity eligible to proceed with NBFC registration.
Step 3: Preparing for NBFC Registration with RBI
Once your company is incorporated, the next focus is getting ready for the RBI’s NBFC CoR application. This stage involves fulfilling several financial and compliance conditions.
Key Requirements:
- Net Owned Fund (NOF):
The company must infuse at least ₹2 crore in equity capital, which should be reflected in the company’s bank account. This amount must not be borrowed and should come directly from the promoters’ own funds. - Directors’ Qualifications:
At least one director must have financial sector experience. RBI evaluates the background, integrity, and financial literacy of all directors. - Business Plan:
A detailed 3–5 year business plan, covering your NBFC’s proposed operations, product offerings, market strategy, and compliance framework, must be submitted. - Infrastructure and Setup:
Your NBFC must have a dedicated office space, appropriate IT systems, and key staff (including a compliance officer and accounts team).
Also Read: What are the Documents Required for Recovery of Shares from IEPF
Step 4: Applying for the NBFC Certificate of Registration (CoR)
After ensuring all requirements are in place, you can now proceed to register NBFC online via the RBI’s COSMOS portal.
Application Process:
- Create a user ID on the RBI COSMOS portal for NBFC registration
- Upload documents, including:
- Company’s COI and PAN
- MoA & AoA with relevant NBFC-related clauses
- Board resolution approving NBFC registration
- Audited financial statements
- Banker’s report confirming NOF
- Income tax returns of promoters/directors
- Detailed business plan
- Submit the physical copy of the application (including a hard copy of all documents) to the RBI’s regional office.
Evaluation:
The RBI will conduct a detailed due diligence of the applicant company, including financial strength, business model, KYC/AML procedures, fit and proper status of directors, and overall readiness to function as an NBFC.
Step 5: Receiving the NBFC CoR from RBI
If your application meets all criteria and no objections are raised, the RBI will issue the Certificate of Registration. Only after receiving this certificate can your company legally begin NBFC operations in India.
Note: RBI may request additional documents or clarifications during the evaluation. It’s not uncommon for the process to take several months, depending on the complexity of your application and RBI’s workload.
Common Mistakes to Avoid
- Submitting incomplete or inconsistent documents
- Using borrowed funds to meet NOF requirement
- Weak or vague business plan
- Non-compliance with KYC norms or lack of IT infrastructure
- Director profile lacking financial sector experience
Avoiding these errors can speed up the approval process and reduce the chances of rejection.
Also Read: Understanding the Types of Alternative Investment Funds in India
Final Thoughts
NBFC registration is a two-stage journey. It begins with SPICe+ company incorporation under the MCA and ends with the RBI’s issuance of the NBFC Certificate of Registration. While the process can seem complex, breaking it down into clear steps and working with an experienced consultant can make it manageable.
If you’re looking to register NBFC online, proper documentation, strong financial backing, and regulatory compliance are non-negotiable. With the right guidance and preparation, you can position your NBFC to make a meaningful impact in India’s financial ecosystem.
FAQs
1. What is the minimum capital requirement for NBFC registration in India?
The minimum Net Owned Fund (NOF) required is ₹2 crore for most NBFC types.
2. Can I register an NBFC online without visiting any government office?
Most of the process is digital, but submission of physical documents to the RBI is still required.
3. How long does it take to get the NBFC Certificate of Registration?
On average, it takes 3 to 6 months after applying to the RBI, depending on the application’s completeness and complexity.
4. Can a foreign national become a director in an NBFC?
Yes, but the majority of directors must be residents of India, and RBI closely evaluates foreign involvement.
