{"id":20524,"date":"2019-06-25T15:51:30","date_gmt":"2019-06-25T10:21:30","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=20524"},"modified":"2025-03-28T17:38:35","modified_gmt":"2025-03-28T12:08:35","slug":"nbfc-prudential-norms-nbfc-compliances","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/nbfc-prudential-norms-nbfc-compliances\/","title":{"rendered":"All About NBFC Prudential Norms &#038; NBFC Compliances"},"content":{"rendered":"<p class=\"has-drop-cap\"><a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;NBFC&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;Non-Banking Financial Companies (NBFC) operate similarly to banks but do not possess the legal status of a bank. Registered under the Companies Act 2013 and governed by the RBI Act&amp;#039;s section(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/nbfc\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>NBFC<\/a> is a company registered under the Companies Act 2013, and any other previous act. It is an important source of Indian Financial System. NBFC is a company which has principal business of receiving deposits. The companies predominantly engaged in the financial activity and get registered with the Reserve Bank of India. It provides credit facilities and preferred more than banks. The company raises fund from the public (Directly or indirectly) and lend them to the ultimate spenders. NBFC cannot run their business without getting a license from the Reserve Bank of India. <\/p>\n\n\n\n<p>RBI verifies the application and if RBI is satisfied that the conditions stipulated are complied with, RBI issues a Certificate of registration to the company. In this article we will discuss about the NBFC prudential norms &amp; NBFC Compliance&rsquo;s in detail;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Criteria of NBFC Registration <\/h2>\n\n\n\n<ul>\n<li>Minimum net owned fund of Rs.2 crore.<\/li>\n\n\n\n<li>CIBIL records must be clean.<\/li>\n\n\n\n<li>A senior banker as full-time director in a\ncompany<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Systematically Important NBFCs<\/h2>\n\n\n\n<p>NBFCs,\nas per the latest audited balance sheet whose asset size is 500 crores, or more\nare considered as systematically important NBFCs. NBFC focus on the financial\nstability of the overall economy.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What\nare the Regulations applicable on non-deposit accepting NBFCs whose asset size\nis less than &#8377; 500 Crore?<\/h2>\n\n\n\n<p>If\nthe NBFCs have not accessed any public funds and do not have any customer\ninterface shall not be subjected to any regulation either prudential or conduct\nof business regulations.<\/p>\n\n\n\n<p>NBFCs having customer interface will be subjected only to conduct of business regulations including FYC, KYC, provided they are not accessing the public funds. As if they are accessing the public funds, they will be subjected to limited prudential regulations.<\/p>\n\n\n\n<p>NBFCs which are involved in both public funds and customer interface exist are subjected to both limited prudential and business regulations.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><img decoding=\"async\" loading=\"lazy\" width=\"484\" height=\"452\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/06\/NBFC-Compliance.png\" alt=\"NBFC Compliances\" class=\"wp-image-20536\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/06\/NBFC-Compliance.png 484w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/06\/NBFC-Compliance-300x280.png 300w\" sizes=\"(max-width: 484px) 100vw, 484px\"\/><\/figure><\/div>\n\n\n<h2 class=\"wp-block-heading\">What are the Post Incorporation NBFC Compliances?<\/h2>\n\n\n\n<p>After receiving a COR from the Reserve Bank of India, it is required for all the Non banking financial companies to become a member of all <a href=\"https:\/\/enterslice.com\/learning\/credit-information-companies-cic\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Credit Information Companies (opens in a new tab)\">Credit Information Companies<\/a> i.e.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Registration to become a member of CIC <\/h3>\n\n\n\n<p>On the <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Basis&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;In finance, the &amp;quot;basis&amp;quot; is a term with several applications, including representing the difference between the spot price and the future contract price of an asset, which is vital in investment(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/basis\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>basis<\/a> of data provided by the member banks of CIC and other financial institution credit information companies prepare a Credit information report and on that basis is Company credit Report prepared for credit rating. In India, these 4 below mentioned companies are treated as credit information companies.<\/p>\n\n\n\n<ul>\n<li><strong>CIBIL-Credit Information Bureau India Limited<\/strong><\/li>\n<\/ul>\n\n\n\n<p>CIBIL was launched as India&rsquo;s first Credit Bureau, an individual can log onto the <strong>CIBIL website<\/strong><sup><a href=\"https:\/\/www.cibil.com\/\"><strong>[1]<\/strong><\/a><\/sup> and fill in the required details in the online form can then get his\/her credit score and report on his\/her registered email id.<\/p>\n\n\n\n<ul>\n<li><strong>Equifax\nCredit Information Services Private Limited<\/strong><\/li>\n<\/ul>\n\n\n\n<p>Equifax has listed its\nservices in India in the year 2010 and has recorded a magnificent growth by\nassembling and assimilating the record of an individual&rsquo;s financial data and\nalso helps in managing the financial profiles of individual consumers.<\/p>\n\n\n\n<ul>\n<li><strong>Experian\nCredit Information Company of India Private Limited<\/strong><\/li>\n<\/ul>\n\n\n\n<p>Experian is helpful to do\na credit check on the consumers and reflects the probability of a consumer\npaying back capacity of his loan and credit.<\/p>\n\n\n\n<ul>\n<li><strong>CRIF\nHigh Mark Credit Information Services Private Limited<\/strong><\/li>\n<\/ul>\n\n\n\n<p>CRIF\nHigh Mark earlier known as High Mark ensures that there are no defaults in the\nfuture and the customer is creditworthy, mostly banks and lenders prefer to go\nto credit rating companies.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">FIU-IND Registration<\/h3>\n\n\n\n<p>Financial Intelligence registration is required for every NBFCs post incorporation and has to report their client details as per the prescribed requirement under the Prevention of Money Laundering Act. <a href=\"https:\/\/enterslice.com\/financial-intelligence-unit-india\">FIU-IND registration<\/a> provides quality financial intelligence for safeguarding the financial system from terrorism-financing and other offenses including money laundering.<\/p>\n\n\n\n<p>The main objective of FIU-IND is to receive suspicious transaction reports and disseminate valuable financial information by collecting and analyzing the information. It acts as a Central Repository and maintains the national data on cash and suspicious transaction on the basis of the reports received from the entities who are reporting.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Central KYC Registration<\/h3>\n\n\n\n<p><strong><a href=\"https:\/\/enterslice.com\/central-kyc-registry-in-india\" target=\"_blank\" rel=\"noreferrer noopener\">Central KYC registration<\/a><\/strong> is one of the most important <strong><a rel=\"noreferrer noopener\" href=\"https:\/\/enterslice.com\/nbfc-annual-compliance\" target=\"_blank\">NBFC compliances<\/a><\/strong> to be done by the NBFCs and rapidly getting adopted by the companies in India. CKYC is termed as a centralized repository which collects the records for the customers in financial services. CERSAI<a rel=\"noreferrer noopener\" aria-label=\"CERSAI  (opens in a new tab)\" href=\"https:\/\/www.cersai.org.in\/CERSAI\/\" target=\"_blank\"> <\/a>(Central Registry of Securitization and Asset Reconstruction and Security Interest in India) is the registry for the Central KYC.<\/p>\n\n\n\n<p>All\nthe entities required to be registered and regulated from Reserve Bank of India\ni.e. NBFCs are required to take registration of Central KYC to reduce the\nburden of the entity by producing and assembling the documents of the consumers\ncreating a new relationship with the financial entity.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">NBS-9-Filling of Return with RBI <\/h3>\n\n\n\n<p>NBS-9 is required to be\nfiled by the NBFCs -ND whose asset size is less than Rs 100 crore.<\/p>\n\n\n\n<p><\/p><div class=\"shadow2\">Due date of filing &ndash; Within 60 days from the end of the financial year<\/div><br>\n\n\n\n<h3 class=\"wp-block-heading\">Annual Compliance to be done by the NBFC <\/h3>\n\n\n\n<p>NBFCs have to comply with the following requirements as Annual NBFC compliances <\/p>\n\n\n\n<ul>\n<li>Reporting\nof Financial Statements and change in management.<\/li>\n\n\n\n<li>Maintenance\nof Statutory Registers<\/li>\n\n\n\n<li>Auditing\nof financial accounts. <\/li>\n<\/ul>\n\n\n\n<p><strong>NBFC Compliances followed by the company annually <\/strong><\/p>\n\n\n\n<ul>\n<li>NBS-7\nUnaudited March monthly return- On or before 30<sup>th<\/sup> June<\/li>\n\n\n\n<li>NBS-7\nAudited March monthly return-Upon Completion.<\/li>\n\n\n\n<li>NBS-4\nfilled on an annual basis to find the repayment status of the rejected NBFCs\naccepting public deposits<\/li>\n\n\n\n<li>Detail\nInformation about the companies having FDI\/Foreign Funds-On or Before 30<sup>th<\/sup>\nJune.<\/li>\n\n\n\n<li>Filing\nof audited Balance sheet and P&amp;L-1 Month from the date of signing.<\/li>\n\n\n\n<li>Declaration\nof Auditors to Act as Auditors of the Company.<\/li>\n\n\n\n<li>Before\nthe commencement of the new Financial year, Resolution of Non-Acceptance of\nPublic Deposit.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Monthly  NBFC Compliances <\/h3>\n\n\n\n<p>Monthly\nreturn NBS-6 has to filed by the NBFCs on exposure to capital <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Market&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;A market is a structured environment, either physical or virtual, where buyers and sellers convene to trade goods and services. This trading hub operates based on the principles of supply and(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/market\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>market<\/a> by 7<sup>TH<\/sup>\nof every month.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Quarterly NBFC Compliances <\/h3><br>\n\n\n\n<figure class=\"wp-block-table aligncenter is-style-stripes\"><table><tbody><tr><td>\n  <strong>FORM\/RETURN<\/strong>\n  <\/td><td>\n  <strong>CRITERIA<\/strong>\n  <\/td><\/tr><tr><td>\n  <strong>NBS-1 <\/strong>\n  <\/td><td>\n  NBS-1 Return is filed by the NBFCs-NDs-SI\n  and NBFCs-SI to capture financial details such as Profit and Loss account, Components\n  of Assets and Liabilities, Exposure to sensitive sectors\n  <\/td><\/tr><tr><td>\n  <strong>NBS-2<\/strong>\n  <\/td><td>   &nbsp;NBS-2 return is filed quarterly to   capture NBFC compliances related to several prudential norms such as Asset   Classification, Capital Adequacy, Net owned Fund.   <\/td><\/tr><tr><td>\n  <strong>NBS-3<\/strong>\n  <\/td><td>NBS-3 return is filed to capture   information about Statutory Investments in the Liquid States which include   Fixed Deposits in Schedules Commercial Bank, Central or State Government   Securities, etc.   <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">What is Asset-Liability\nManagement Returns?<\/h2>\n\n\n\n<p>NBFCS-ND-SI\non regular interval has to file multiple returns as ALM returns-<\/p>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table><tbody><tr><td>\n  <strong>NBS-ALM1<\/strong>\n  <\/td><td>\n  Short term dynamic liquidity\n  <\/td><\/tr><tr><td>\n  <strong>NBS-ALM2<\/strong>\n  <\/td><td>\n  Structural liquidity\n  <\/td><\/tr><tr><td>\n  <strong>NBS-ALM3<\/strong>\n  <\/td><td>\n  Interest Rate Sensitivity\n  <\/td><\/tr><tr><td>\n  <strong>ALM-YRLY<\/strong>\n  <\/td><td>\n  Statement of Assets Liability Mismatch\n  <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>NBFC shall also submit the branch information return on a quarterly basis.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter\"><img decoding=\"async\" loading=\"lazy\" width=\"442\" height=\"403\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/06\/NBFC-Post-Incorporation-Compliances.png\" alt=\"NBFC Compliances\" class=\"wp-image-20537\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/06\/NBFC-Post-Incorporation-Compliances.png 442w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/06\/NBFC-Post-Incorporation-Compliances-300x274.png 300w\" sizes=\"(max-width: 442px) 100vw, 442px\"\/><\/figure><\/div>\n\n\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<p>NBFC registered with RBI have to comply with all the NBFC compliances on Annual, quarterly and monthly basis and must have a net owned fund of Rs 200 lakh. As NBFC is contributing a large percentage of GDP rise in the company economy. <\/p>\n\n\n\n<p>Non-compliance by NBFC will lead to failure of the business of NBFC and as a consequence result in company&rsquo;s closure or <a href=\"https:\/\/enterslice.com\/learning\/nbfc-license-cancellation-procedure-and-grounds\">cancellation of NBFC license<\/a>.<\/p>\n\n\n\n<p><strong>Read our article<\/strong>: <mark><a href=\"https:\/\/enterslice.com\/learning\/revised-regulatory-norms-nbfc\/\">Revised Regulatory Norms for NBFCs as Notified by the Reserve Bank of India!<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>NBFC is a company registered under the Companies Act 2013, and any other previous act. It is an important source of Indian Financial System. NBFC is a company which has principal business of receiving deposits. The companies predominantly engaged in the financial activity and get registered with the Reserve Bank of India. It provides credit [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":20550,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[6],"tags":[2569],"acf":{"service_id":"57"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Complete Guide to NBFC Prudential Norms &amp; Compliance Requirements<\/title>\n<meta name=\"description\" content=\"NBFC registered with RBI have to comply with all the NBFC compliances on Annual, quarterly and monthly basis and must have a net owned fund of Rs 200 lakh.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/nbfc-prudential-norms-nbfc-compliances\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Complete Guide to NBFC Prudential Norms &amp; Compliance Requirements\" \/>\n<meta property=\"og:description\" content=\"NBFC registered with RBI have to comply with all the NBFC compliances on Annual, quarterly and monthly basis and must have a net owned fund of Rs 200 lakh.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/nbfc-prudential-norms-nbfc-compliances\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:author\" content=\"enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2019-06-25T10:21:30+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-03-28T12:08:35+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/06\/NBFC-Compliances-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"700\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Narendra Kumar","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/04\/nk-1.jpg","authorDescription":"Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.","postViews":534,"readingTime":4,"nextPost":{"id":20579,"slug":"learn-all-about-nbfc-advantages"},"prevPost":{"id":20472,"slug":"registration-of-limited-liability-partnership-llp-with-foreign-directors"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/06\/NBFC-Compliances-1.jpg","postTerms":"NBFC","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/20524"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=20524"}],"version-history":[{"count":1,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/20524\/revisions"}],"predecessor-version":[{"id":88818,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/20524\/revisions\/88818"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/20550"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=20524"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=20524"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=20524"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}