What is NBFC Compliance
A Non-Banking Financial Company (NBFC) is a financial institution offering banking-like services—such as loans, credit, asset financing, and wealth management—without being a bank or having a banking license. NBFCs bridge financial gaps, especially for underserved businesses and individuals. However, operating in this space demands adherence to the Reserve Bank of India’s (RBI) strict regulatory requirements.
Why Are NBFC Compliances Crucial?
Mitigates Financial Risks:
Non-compliance can lead to hefty fines and legal expenses. Maintaining NBFC compliance minimizes financial risks, directing resources toward growth and NBFC portfolio development rather than penalties.
Reduces Operational Risks:
Compliance ensures that NBFCs follow stringent internal controls and risk management practices, reducing the likelihood of fraud, data breaches, and other operational risks.
Protects Your Reputation:
Non-compliance can tarnish your reputation. Customers and investors are likelier to trust a company that adheres to RBI regulations
Ensure Business Sustainability
Maintaining compliance is vital for business continuity. Non-compliance can jeopardize your license, leading to potential closure.
One-Time Mandatory Registrations for All NBFCs
Registration with Credit Information Companies (CIC) : Every NBFC must register with all four credit bureaus – CIBIL, Equifax, Experian, and CRIF Highmark. Registration must be completed before disbursing the first loan or before commencing financial operations. Monthly reporting of the entire loan book must be submitted to CICs .
CKYC (Central KYC) Registration : Mandatory for new entity registration and new borrower KYC verification. CKYC for new borrowers must be completed within 10 days of loan disbursement. Helps in streamlining customer onboarding and reducing fraud risks.
FIU-IND Registration (Financial Intelligence Unit – India) : Every NBFC must register with FIU-IND to track and report suspicious transactions. Mandatory for transactions above ₹10 Lakhs or high-value cash transactions. Helps in preventing money laundering and financial fraud.
NESL Registration (National E-Governance Services Ltd.) Required : for entity registration on the NESL platform for digital financial transactions. NBFCs must upload and provide charge-related information to the IBBI . Ensures compliance with digital loan documentation and debt recovery processes.
CERSAI (Central Registry of Securitization and Asset Reconstruction) Registration : Mandatory registration for securitization and asset reconstruction transactions. Helps in tracking financial asset ownership and security interests. Ensures NBFC compliance with SARFAESI Act regulations.
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