RBI Guidelines for NBFC Registration: Updated for 2025

With the Indian economy becoming increasingly digitized and inclusive, Non-Banking Financial Companies (NBFCs) have emerged as critical drivers of financial services, especially in underserved regions. To operate legally and responsibly in this evolving space, understanding the RBI guidelines for NBFC registration is essential — particularly with recent updates rolled out in 2025.

Whether you're an entrepreneur, investor, or financial professional, this guide provides an updated and comprehensive overview of the NBFC registration process and how to complete your NBFC registration online in compliance with the latest Reserve Bank of India (RBI) rules.

What is an NBFC?

A Non-Banking Financial Company (NBFC) is a financial institution that provides services similar to banks — such as loans, credit facilities, leasing, and investments — but does not hold a banking license. NBFCs are governed by the Reserve Bank of India Act, 1934, and more specifically by the directives issued under Chapter III-B.

NBFCs are vital in reaching financially excluded segments, offering flexible financing solutions to MSMEs, consumers, and rural customers.

Why NBFC Registration is Crucial

Operating as an NBFC in India without proper registration from the RBI is illegal and can result in severe penalties. Formal NBFC registration ensures regulatory oversight, protects customer interests, and improves your credibility with lenders, partners, and investors.

Only companies that meet RBI’s eligibility criteria and obtain the Certificate of Registration (CoR) can legally offer NBFC services.

Types of NBFCs Recognized by RBI (2025)

As per the RBI’s latest framework, NBFCs are now categorized based on their size, complexity, and risk profile. The following key types exist:

  1. NBFC-Investment and Credit Company (NBFC-ICC) – Combines asset finance, loan, and investment activities.

  2. NBFC-Micro Finance Institution (NBFC-MFI) – Provides loans to low-income groups without collateral.

  3. NBFC-Factor – Focused on factoring and invoice discounting services.

  4. NBFC-Account Aggregator (NBFC-AA) – Facilitates financial data sharing across institutions with customer consent.

  5. NBFC-Infrastructure Finance Company (NBFC-IFC) – Specializes in infrastructure lending.

  6. NBFC-Peer to Peer Lending Platform (NBFC-P2P) – Operates digital platforms for direct lending between individuals.

Each category has its specific guidelines, but all NBFCs must follow a standard NBFC registration process outlined by the RBI.

Eligibility Criteria for NBFC Registration (Updated 2025)

Before applying for NBFC registration online, ensure your company meets the following RBI-mandated conditions:

  • The company must be registered under the Companies Act, 2013 (Private Ltd or Public Ltd)

  • Minimum Net Owned Funds (NOF) of ₹10 crore (raised from ₹2 crore in previous years)

  • At least one director must have experience in banking or finance

  • Must have a clean credit history and no criminal background

  • The company’s business objectives must align with financial activities defined under the RBI Act

  • Must have a registered office in India

  • Must implement a robust IT and compliance framework, especially for digital lending platforms

Step-by-Step NBFC Registration Process

Here is the NBFC registration process you must follow in 2025:

Step 1: Incorporate a Company

Register your business as a Private Limited or Public Limited Company under the Companies Act, 2013. Define financial activities in the Memorandum of Association (MoA).

Step 2: Ensure Capital Requirements

Deposit a minimum of ₹10 crore in the company’s bank account. This must be in the form of equity capital (not loans or borrowed funds).

Step 3: Prepare Documents

Gather the following documents for submission:

  • Certificate of Incorporation (COI) from MCA

  • MoA and Articles of Association (AoA)

  • Board resolution approving NBFC registration

  • Net worth certificate from a Chartered Accountant

  • Banker’s report confirming fund availability

  • Detailed business plan (5 years)

  • KYC documents of directors and shareholders

  • Organizational structure and IT policies

  • Audited financial statements (if applicable)

Step 4: Apply for NBFC Registration Online

Visit the RBI’s official portal for COSMOS (Company Registration) and submit the online application.

  • Register and login to RBI's COSMOS portal

  • Upload all required documents

  • Pay the necessary registration fee (non-refundable)

  • Note the Company Application Reference Number (CARN) for tracking

Step 5: Submit Physical Documents

After online submission, print the application form and submit it along with hard copies of supporting documents to the Regional RBI Office within 30 days.

Step 6: RBI Review and Approval

The RBI will review your application, conduct background checks, and verify the business model. The process may take 3 to 6 months depending on complexity.

Upon approval, you will receive the Certificate of Registration (CoR) — the legal license to operate as an NBFC in India.

Also Read: What are the Documents Required for Recovery of Shares from IEPF

Post-Registration Compliance for NBFCs

Getting your NBFC registered is just the beginning. Compliance is key to long-term operation and success. Here's what you must do after registration:

  • Appoint a Compliance Officer

  • Implement an Internal Audit System

  • File Annual Returns, Statutory Auditor Certificates, and Quarterly Returns

  • Adhere to Know Your Customer (KYC) and Anti-Money Laundering (AML) norms

  • Submit regular reports via RBI’s CORES platform

  • Maintain a Capital Adequacy Ratio (CAR) as per risk profile

  • Conduct board meetings and maintain governance standards

In case of digital lending, you must comply with RBI's Digital Lending Guidelines which include clear disclosure norms, grievance redressal, and data privacy protocols.

Common Challenges in NBFC Registration

Many applicants face delays or rejections during the NBFC registration process due to:

  • Insufficient or improperly documented Net Owned Funds

  • Inexperienced directors without financial sector background

  • Incomplete or inconsistent business plans

  • Inadequate IT infrastructure (especially for digital NBFCs)

  • Weak internal controls and compliance mechanisms

Engaging a legal or consulting firm that specializes in NBFC registration online can help streamline documentation and avoid pitfalls.

Recent Changes in RBI NBFC Guidelines (2025 Update)

As part of strengthening India’s financial ecosystem, the RBI introduced several reforms in 2025:

  • Raised Net Owned Fund requirement to ₹10 crore

  • Mandated Risk-Based Supervision (RBS) for all systemically important NBFCs

  • Introduced stricter digital lending regulations and data privacy requirements

  • Required audit trails and independent compliance systems for tech-based NBFCs

  • Revised classification framework for NBFC layers: Base Layer, Middle Layer, Upper Layer

These changes are aimed at ensuring financial stability, consumer protection, and responsible innovation in the NBFC space.

Also Read: Who can Register for an Alternative Investment Fund License?

Conclusion

Navigating the NBFC registration process can seem daunting, but with the right preparation and understanding of RBI regulations, it's entirely achievable. Whether you're starting a microfinance firm, a digital lending platform, or an asset financing NBFC, compliance is key.

As of 2025, the NBFC registration online process has become more transparent and structured. Still, professional support and a strong internal compliance culture can make the difference between approval and delay.

By staying updated with RBI’s evolving framework, entrepreneurs can unlock significant opportunities in India's dynamic financial services sector.

Frequently Asked Questions (FAQ)

1. Can I apply for NBFC registration online?

Yes. The RBI allows applicants to submit their NBFC registration applications online through its COSMOS portal. However, physical copies of supporting documents must still be submitted to the RBI Regional Office.


2. What is the minimum capital required for NBFC registration in 2025?

As per the latest RBI guidelines, you need a minimum Net Owned Fund (NOF) of ₹10 crore to register a new NBFC in India. This capital must be equity-based and not borrowed.


3. How long does the NBFC registration process take?

The typical timeline is between 3 to 6 months, depending on the completeness of your application, background checks, and RBI’s internal processes. Timely and accurate documentation can reduce delays.

E-mail me when people leave their comments –

As an experienced global business setup consultant, I help entrepreneurs, SMEs, and corporations navigate NBFC and AIF registration, compliance, and tax structuring across jurisdictions. I specialize in aligning business strategies with local regulatory requirements while optimizing tax efficiency and minimizing risk. Whether you're entering new markets or restructuring entities, I deliver customized solutions that support growth, ensure operational compliance, and drive long-term success across borders.

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