NBFC Registration your trusted growth partner for Non-Banking financial companies (NBFCs).
NBFC Registration your trusted growth partner for Non-Banking financial companies (NBFCs).
Our NBFC Consultant team offers over 20+ years of collective expertise, featuring a dedicated team of former bankers and experienced CA and CS professionals. We deliver strategic, expert-driven solutions to support your business’s growth and success
Under the Scale Based Regulation (SBR) framework established by the RBI for NBFCs, compliance requirements vary based on the size and systemic importance of NBFCs. NBFCs must register with credit Information Company (CIC), Financial Intelligence Unit, Information Utility, Central KYC and Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI) as per its nature of activities.Entities registered under the Companies Act, 1956 / 2013, are eligible to apply to the RBI for an NBFC license in accordance with section 45-I (c) of the RBI Act 1934. NBFCs are essential to the way that financial functions are carried out in our economy.
Base Layer NBFCs are subject to the basic regulatory framework prescribed by the RBI.
● They must comply with prudential norms related to capital adequacy, asset classification, and provisioning requirements.
● Base Layer NBFCs are required to maintain adequate capital adequacy ratios (CAR) to absorb losses and mitigate risks.
● They must adhere to Know Your Customer (KYC) and Anti-Money Laundering (AML) guidelines for customer identification and transaction monitoring.
● Base Layer NBFCs are also required to submit periodic regulatory reports and disclosures to the RBI.
Middle Layer NBFCs have a larger asset size compared to Base Layer NBFCs and are subject to additional regulatory requirements.
● In addition to the basic regulatory framework applicable to Base Layer NBFCs, Middle Layer NBFCs may have stricter capital adequacy requirements and risk management standards.
● They must comply with more comprehensive reporting and disclosure requirements to provide greater transparency and accountability to regulatory authorities.
Upper Layer NBFCs are deemed systemically important due to their size and systemic significance.
● They are subject to the highest level of regulatory scrutiny and prudential norms to ensure financial stcability and systemic resilience.
● Upper Layer NBFCs must maintain robust risk management frameworks, including stringent capital adequacy requirements, liquidity management standards, and stress testing.
● They are required to undergo regular on-site inspections, audits, and compliance reviews by the RBI to assess their financial health and compliance with regulatory requirements.
● Upper Layer NBFCs must also comply with additional regulatory directives and guidelines issued by the RBI to mitigate systemic risks and safeguard the stability of the financial system.
According to SBR, the regulatory framework for NBFCs was divided into four tiers. As a result, the NBFC return schedule has been updated to reflect the applicability of the amended framework and these four levels.
