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NBFC Compliances in India

Q: What is the difference between a deposit-taking and a non-deposit-taking NBFC?

Deposit-taking NBFCs (NBFC-D) are authorized to accept public deposits, whereas non-deposit-taking NBFCs (NBFC-ND) cannot accept public deposits and rely on other funding sources like bank loans or equity.

Q: What is the penalty for not filing NBFC returns on time?

Failure to file returns within the prescribed timeline may attract monetary penalties, suspension of operations, or cancellation of the NBFC license by the RBI, depending on the severity and frequency of non-compliance.

Q: What is the purpose of the NBS-7 and NBS-9 returns?

NBS-7 is filed by deposit-taking NBFCs to report their financial details, including assets, liabilities, and compliance status. NBS-9 is filed by non-deposit-taking NBFCs with an asset size between ₹100 crore and ₹500 crore to provide periodic financial and operational data to the RBI.

Q: Can all NBFCs accept deposits from the public?

No, only NBFCs that have been specifically authorized by the RBI and meet certain criteria are allowed to accept public deposits. Most NBFCs operate as non-deposit-taking entities.

Q: What is a Statutory Auditor Certificate (SAC)?

The Statutory Auditor Certificate is a mandatory certification issued by a company's auditor to confirm that the NBFC meets all applicable regulatory norms, including those related to asset classification, provisioning, and compliance with the NOF requirement.

Q: How does the RBI's XBRL system work for filing returns?

The RBI uses the XBRL (eXtensible Business Reporting Language) platform for seamless and structured electronic submission of returns. NBFCs must upload data in the specified format for regulatory review, which enhances accuracy and efficiency in compliance monitoring.

Q: What does the "principal business" or "50-50 test" mean for a company?

The 50-50 test determines whether a company's primary business is financial. If more than 50% of a company's total assets and more than 50% of its income are from financial activities, it qualifies as an NBFC and must register with the RBI.

Q: Can an NBFC accept deposits from NRIs?

Generally, NBFCs are not permitted to accept deposits from Non-Resident Indians (NRIs). However, exceptions may apply in specific cases with prior RBI approval and under FEMA regulations.

Q: What are the main compliances under the Companies Act for an NBFC?

NBFCs must comply with standard corporate laws under the Companies Act, 2013, such as annual filings with the Registrar of Companies (RoC), conducting board meetings, maintaining statutory registers, and ensuring auditor appointments and disclosures.

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Frequently Asked Questions (FAQs)

What is the minimum Net Owned Fund (NOF) required for an NBFC?

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As per RBI guidelines, an NBFC must have a minimum Net Owned Fund of ₹10 crore (for most categories) to be eligible for registration. However, this threshold may vary depending on the type of NBFC.

What is the difference between a deposit-taking and a non-deposit-taking NBFC?

What is the penalty for not filing NBFC returns on time?

What is the purpose of the NBS-7 and NBS-9 returns?

Can all NBFCs accept deposits from the public?

What is a Statutory Auditor Certificate (SAC)?

How does the RBI's XBRL system work for filing returns?

What does the "principal business" or "50-50 test" mean for a company?

Can an NBFC accept deposits from NRIs?

What are the main compliances under the Companies Act for an NBFC?

What is the Fair Practices Code (FPC)?

Which NBFCs are exempt from RBI registration?

Why Choose RegisterKaro for the NBFC Compliance Service?

Partnering with an experienced firm for NBFC compliance is crucial in today's complex regulatory environment. Here's why RegisterKaro stands out as an ideal choice for your NBFC's compliance needs:

Expert Team with Deep Regulatory Knowledge: Our team of CAs, CSs, and legal experts offers an in-depth understanding of RBI regulations, the Companies Act, tax laws, and FEMA.
End-to-End Service Under One Roof: We provide comprehensive services from NBFC registration and ongoing RBI filings to corporate secretarial and tax compliances.
Proactive and Timely Filings: We ensure all filings are completed well before deadlines, using automated reminders and dedicated compliance managers to avoid penalties.
Stay Ahead of Regulatory Changes: We continuously monitor regulatory updates and proactively help your NBFC adapt to new guidelines, ensuring ongoing compliance.

Why Choose RegisterKaro for the NBFC Compliance Service?

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