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| Updated: 02 Feb, 2019

How Following NBFC Compliances Can Save You From Prison

NBFC Compliances are one of the pillars of the successfulness of its business. It is a fact that every NBFC applicant has to face the hurdles at the time of registration. The NBFC compliances are regulated by RBI. NBFC’s like Mahindra and Mahindra Finance Company, Bajaj Finserv or LIC housing Finance Limited had ridden the same boat.
NBFC have come to the stage of developing and acting as a significant segment of the Indian Financial System. Not likely, Commercial and Co-operative banks they carry out the financial intermediation in a variety of ways like the issue of loans and advances, leasing, hire, accepting a deposit (after the approval of RBI), purchasing, etc.
In addition to this,
– They raise funds from the public directly or indirectly and lend them to the ultimate borrower,
– They advance loans to the various wholesale & retailers, small-scale industries and even self-employed person.
– They have also widened the range of the products and service offered by the financial sector.
Slowly they are acknowledged as a parallel to the banking sector due to their customer-oriented services, facile procedure, attractive rate of returns on deposits, Flexibility and timeliness in completing the credit needs of specified sectors, etc.

What is the meaning of NBFC?

An NBFC is a financial company whose principal business is to provide loans and advances, acquisition of shares, debentures and other stocks that are issued by Government or other local authority, insurance business, leasing, hire- purchase, etc.
Following are the compliances needs to be complied by every NBFC –
• Registration of NBFC

Under section 45 I(a) of the RBI act 1934, no company can commence or carry on the business of Non- Banking Financial Institution without obtaining the certificate of registration from the RBI.

Furthermore, the company registered as NBFC should also fulfill the following norms-
– The company should be incorporated under the Companies act 2013
– The company should have a minimum net owned funds of INR 2 crores
– The company should submit the hard copy of the application in the prescribed format along with all documents to the RBI office
RBI after verifying all the documents will grant the certificate of NBFC registration and NBFC license to the applicant company within 90 to 120 days. We at Corpbiz, have a quality track record of registering NBFC of a number of a happy customers.

NBFC Registration

• Compliances under Non- Banking Financial Companies

-Application Forms
(1) Application form for registration with RBI to commence or carry on the activity of NBFC
(2) Application Form of Request for Certificate of Registration to commence or carry on the activity of Core Investment company by company
(3) Application Form of request for Certificate of registration to commence or carry on the activity of Mortgage Guarantee company
(4) Application Form of Request for certificate of registration to commence or carry on the activity of Securitization business or Reconstruction Business
-Monthly compliances

Form namePurpose of the fromDepartment
Submitted by all NBFC-NDSIs (Non- Deposit Taking NBFCs)
Monthly ReturnMonthly return on NBFC- ND-SI with asset size of Rs 100 crores and aboveRBI
NBS_ALM-1Statement of Shirt Term Dynamic liquidity (within 10 days of the close of the month)RBI
Give info by all Non- Banking Financial Companies accepting or holding deposits having asset size above 100 crores or having public deposit of RS 20 crores or above
NBS-6Monthly return on Exposure to capital marketRBI

-Quarterly Compliances

Form namePurpose of the fromDepartment
Submitted by all on- banking Financial Companies accepting or holding deposits and MNBCs- Except Residuary Non-Banking Companies
NBS 1Quarterly Return on Important Financial parameter of Deposit taking NBFCsRBI
NBS-2Quarterly statement of Capital Fund, Risk Asset/Exposures and risk asset ratioRBI
CA&CEO certificate for NBS-2Certifying NBS-2RBI
NBS-3Quarterly Return on statutory Liquid AssetsRBI
NBS-4Repayment of Deposit only in the respect of rejected/cancelled companiesDepartment of Non- banking Supervision, RBI
CA certificate for NBS 4Certifying NBS-4RBI
Submitted by all Residuary Non- Banking Companies
NBS 3AQuarterly Return on Statutory Liquid AssetsRBI
Quarterly Return 1Return of Investment 
Submitted by all NBFC- NDSIs (Non-Deposit Taking NBFC)
NBS-7Quarterly statement of Capital Fund, Risk Asset/Exposures and risk asset ratioRBI
CA&CEO certificate for NBS-7Certifying NBS- 7RBI
Submitted by NBFCs having asset size between 50-100 crores
Quarterly ReturnQuarterly return by NBFC-ND with Asset size of Rs 50-100 croreRBI
Submitted by all SCRCs (Securitization and Re- construction Company)
SCRCQuarterly statement of assets acquires, securitized and reconstructedRBI
Submitted by all NBFCs
Branch InfoBranch DetailsRBI

-Half- yearly Compliances

Form namePurpose of the fromDepartment
Given in to by all Non- banking financial companies accepting or holding public deposits having asset size above Rs 100 crores or having public deposit of Rs 20 Crores and above
NBS- ALM-2Asset liability mismatches and interest rate exposure (within 20 days of the close of half year)Reginal office of the department in whose jurisdiction NBFC is registered
Given to all by all NBFC- NDSIs (Non- Deposit taking NBFCs)
NBS_ALM-3Interest rate sensitivityStatement hall filed with the bank
NBS- 6Monthly Return On exposure to capital MarketRBI

-Yearly Compliance’s

Form namePurpose of the fromDepartment
Given in to by all NBFC-NDSIs (Non- Deposit Taking NBFCs)
ALM_ReturnAsset Liability Mismatches and Interest rate exposureRBI
Submitted by all Residuary Non- Banking Companies
Form- NBS 1AAnnual Return on Deposits (once in year after March 31 and latest by September 30)Regional office of department of Non- banking Supervision, RBI where registered office of the company is situated
Given in to by NBFCs having asset size between 100 to 500 crores
NBS- 8Annual return on NBFCs having asset size from Rs100 crore to 500croreRBI
Submitted by NBFC having asset size below 100 crores
NBS-9Annual Return on NBFCs having asset size below Rs 100 croresRBI
Given in to by all Non- banking financial companies accepting deposits and MNBCs- except Residuary Non- Banking Companies
NBS-4Repayment of Deposits only in respect6 of rejected or cancelled companiesDepartment of Non-Banking Supervision, RBI
CA certificate for NBS 4Certifying NBS- 4RBI

-Extra Compliances under NBFC

Form namePurpose of the fromDepartment
Filled In by all residuary non- banking financial companies
Form Schedule “A”General Information of the company (once a year as early as possible latest by the 30th September)Regional Office of the Department of Supervision, Financial Companies Wing
Submitted by all NBFCs whether holding public deposit or not
Special ReturnGeneral information and Net Owned FundsRBI

-Under Companies Act, 2013

Form namePurpose of the fromDepartment
E- form MGT- 7Filling of Annual Return (within 60days of AGM)ROC
E- form AOC- 4Filing of Balance sheet and profit loss and account (within 30 days of AGM)ROC
E- form DIR 12If there is any change in Director (within 30 days of the change)ROC

-NBFC- NDSIs (Non- Deposit taking NBFCs)

Form namePurpose of the fromDepartment
Monthly ReturnMonthly Return on NBFC-ND-SI with asset size of 100 crore and aboveRBI
NBS-ALM-1Statement of short term dynamic liquidity (within 10 days of the close of the month)RBI
NBS-7Quarterly statement of capital funds, risk assets/ exposure and risk asset ratio)RBI
SA & CEO certificate for NBS-7Certifying NBS-7RBI
NBS_ALM-3Interest rate SensitivityStatement shall file with the bank
ALM_ReturnAsset liability mismatches and interest rate exposureRBI

-Submission of Annual Statement and Returns

NBFC-ND-SI (Non- Deposit category) will submit an annual statement of capital fund, risk assets ratio and other reports electronically as well as physically. The capital adequacy of 15% is to mandatorily maintain with the disclosures in the balance sheet as a submission of annual statement and returns.
-Annual Compliance of Returns

Serial No.ParticularsTime limit
1.Unaudited March Monthly return/NBS7On or before 30th June
2.Audited March MonthlyUpon completion
3.Statutory Auditor Certificate on Income and AssetsOn or before 30th June
4.Information about Cos with FDI/ Foreign FundsOn or before 30th June
5.Resolution of Non- acceptance of Public depositBefore the commencement of the new Financial year
6.File Audited Annual Balance sheet and Profit and loss accountOne month from the date of signoff
7.Declaration of Auditor to Act as Auditor of the CompanyAnnual basis

-Monthly compliance
On every 7th of month the company needs to file their monthly returns
Periodical Compliances

Serial No.ParticularsTime limit
1.Appointment of DirectorWithin 30 day of appointment
2.Resignation of Director (DIR-12+challan receipt)Within 30 days of resignation
3.Adoption of any notification in the ensuring board meeting and filing the certified copy with RBI 

In Conclusion
We have tried to give you the best research to our knowledge on NBFC compliances. Although, the compliances cannot be summarized in the single article so we advised you to consult the professional before going down the road of commencement of NBFC. For any query please contact us

Also, Read: Impact of GST on Tourism Industry

Author Info

Akash Kumar is working as a content writer with Corpbiz, a Chartered Accountancy firm helping Startup & companies in setting up the business and complying with various tax laws applicable to Indian & foreign companies while establishing their business.