NBFC Compliances
related to RBI
A Non-Banking Financial Company (NBFC) is a financial institution which is registered under the Companies Act, 2013 and regulated by the Reserve Bank of India (RBI). Even NBFCs do not hold a banking licence, they are permitted to carry out the activities such as lending, investment, hire-purchase, leasing, and other financial services.
NBFCs have critical role in the financial system, so they must comply with stringent regulatory requirements prescribed by the RBI to ensure financial stability, customer protection, and systemic safety.
Adhering to RBI compliances is essential for maintaining the NBFC’s licence and ensuring smooth business operations.
Compliances
Initial Requirements
Registration:
Certificate of Registration (CoR) must be obtained by every NBFC under Section 45-IA of the RBI Act, 1934. A minimum Net Owned Fund (NOF) of ₹10 crore is required. This NOF requirement applies to all new NBFCs at the time of incorporation.
Governance & Risk Management
NBFCs have to maintain minimum Capital to Risk-weighted Assets Ratio (CRAR) as prescribed by RBI.
Ensure proper board composition, including independent directors where applicable.
Constitute mandatory committees such as:
- Audit Committee
- Risk Management Committee
Implement strong internal control systems, including:
- Risk management policies
- Internal audit mechanisms
- Compliance monitoring frameworks
KYC, AML & Customer Protection
NBFCs have to comply with KYC (Know Your Customer) and AML (Anti-Money Laundering) norms under applicable laws. Provide Suspicious Transaction Reports (STRs) to the appropriate authority. Follow RBI-approved digital/e-KYC procedures.
Ensure adherence to Fair Practices Code, including:
- Transparent pricing
- Proper loan disclosures
- Effective grievance redressal mechanism
Operational & IT Compliance
- Implement robust cybersecurity frameworks.
- Ensure data protection and privacy compliance as per applicable laws.
- Conduct regular IT audits and risk assessments.
- Maintain proper technology risk management policies.
RBI Compliance for NBFCs
Compliance Forms Index
A. Annual Compliances
| Form | Particulars | Due Date |
|---|---|---|
| DNBS-10 | Statutory Auditors Certificate (SAC) for continued compliance | 31st Dec. |
| Declaration | Board declaration for non-acceptance of public deposits | 30th April |
| Form A Certificate | Appointment of Statutory Auditor (SCA/SA) | 21st April |
| Annex VII | Credit Information Reporting (post cancellation cases) | 10th April |
B. Half-Yearly Compliances
| Form | Particulars | Due Date |
|---|---|---|
| IRF Transactions Statement | Reporting of Interest Rate Futures transactions | 30 Apr, 31 Oct |
| CIC Compliance Report | Non-adherence to data submission timelines | 31 Mar, 30 Sep |
| CIC Non-Compliance Report | Delay in response by credit institutions | 31 Mar, 30 Sep |
| DQI Report | Data Quality Index reporting | 31 Mar, 30 Sep |
C. Quarterly Compliances
| Form | Particulars | Due Date |
|---|---|---|
| Annex X | Reporting of pledged securities (NBFC ≥ ₹100 Cr assets) | Quarterly |
| DNBS-01 | Financial details (UL/ML NBFCs) | 21 Apr, 21 Jul, 21 Oct, 21 Jan |
| DNBS-02 | Financial details & prudential norms (NBFC-BL) | 21 Apr, 21 Jul, 21 Oct, 21 Jan |
| DNBS-03 | Prudential norms (capital adequacy, provisioning) | Same as above |
| DNBS-04A | Liquidity & ALM reporting | Same as above |
| DNBS-07 | ARC financial parameters | Same as above |
| DNBS-13 | Overseas investment return | Same as above |
| FMR-IV | Fraud/theft/robbery reporting | 15 Apr, 15 Jul, 15 Oct, 15 Jan |
| Appendix VI-A | Liquidity risk disclosure | Quarterly |
| DNBS-11/12/14 | Returns for CICs and P2P NBFCs | Same as above |
D. Monthly Compliances
| Form | Particulars | Due Date |
|---|---|---|
| Annex XXV | Large exposure reporting (NBFC-UL) | Monthly |
| Annex XIX | Secured assets possession reporting | Monthly |
| DNBS-04B | Structural liquidity & interest rate sensitivity | Within 15 days |
| DNBS-08 | CRILC main return | Within 15 days |
E. Weekly Compliances
| Form | Particulars | Due Date |
|---|---|---|
| DNBS-09 (CRILC RBD) | SMA-0 borrower reporting | By next Wednesday |
| Annex IV | Uniform credit reporting | Within 7 days of fortnight |
F. Event-Based Compliances
| Form | Particulars | Timeline |
|---|---|---|
| Annex II | Reporting of wilful defaulters | On occurrence |
| Fraud Monitoring Return | Reporting of fraud cases | Within 14 days |
| FMR-IV | Theft/dacoity/robbery reporting | Within 7 days |
| Credit Information Update | Data submission to CICs | Fortnightly (15th & month-end) |
Conclusion
NBFCs operate in a highly regulated environment where timely compliance with RBI regulations is critical. Non-compliance can lead to heavy penalties, reputational damage, or even cancellation of the Certificate of Registration.
A structured compliance system and regular monitoring ensure that the NBFC remains compliant, operational, and trusted in the financial ecosystem.