NBFC Audit Services

Escorting the NBFC Audit Services by RBI Guidelines & Laws

The financial sector is effectively serving the needs of the economy by streamlining savings towards productive purposes. NBFCs are an important component of the financial sector and fulfil the requirements of various business sectors like small entrepreneurs, SMEs, startups, individuals who are self-employed, etc., by fulfilling the funding or credit requirements. The RBI has stated a regulatory regime for the function and registration of NBFC to prevent misuse of public funds and maintain the functioning of the economy. Our team of experts helps in the analysis and review of the various aspects of audits for NBFC to maintain efficiency. Enterslice provides NBFC Audit services to help the company’s financial transactions by investigating the transactions or records and updating the NBFC with inaccuracies in management or operations. Our NBFC Audit Services, to verify the business activities of the NBFC, such as financial audits for NBFCs, checking of credits, and the financial transaction of the company, need to comply with the applicable law. Enterslice helps NBFC to get a banking license, keep NBFC updated with the latest amendments and assists in meeting the credit demands. We provide our services to ensure accuracy, prevent the NBFC from malpractices and maintain an ethical and transparent system for conducting credit facilities. Enterslice has a team of experienced professionals to assist NBFC in meeting the rising demand for credit and compliance with the Reserve Bank of India guidelines and other laws.

Why opt for NBFC Audit Services from Enterslice?

Tailored Solution

Enterslice has a team of experts to provide you with the NBFC Audit Service to your problem and assist you in the analysis and review of the various aspects of audits for NBFC to maintain efficiency. Enterslice provides NBFC Audit services to help the company’s financial transactions and update the NBFC with inaccuracies in management or operations. Our NBFC Audit Services verify the business activities such as financial audits for NBFCs, checking of credit demands, and compliance with the financial transaction of the company needs with the applicable law. Also, helps in securing a banking license.

Regulatory Compliance Audit

Enterslice assures that the NBFC is complying with laws and guidelines by the RBI to maintain its functioning. Enterslice provides NBFC Audit Services to ensure compliance with regulatory requirements and provides stakeholders or investors with reliable financial information.

Risk Assessment and Credit Checks

Enterslice provides NBFC Audit Services to perform a risk assessment to obtain an understanding of the workings of NBFC and their internal controls assessment to identify and assess the risk of non-compliance and perform a credit check to mitigate the risks while funding.

Comprehensive Due Diligence

Our NBFC Audit Services, by our team of experts, conduct thorough due diligence reports during mergers and acquisitions or partnerships to provide accurate representations of the financial health of the NBFCs. Our team will examine the NBFC's assets and liabilities to find the feasibility of making investments.

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Benefits for NBFC Audits with Our NBFC Audit Services

Financial Regulatory Auditing

Financial audits deal with determining the accuracy of the financial statement and information, and our NBFC audit services, after due diligence of the financial transaction, present adequate disclosures under the prescribed financial reporting and regulatory framework.

NBFC Compliance Assurance

Our NBFC Audit services perform NBFC Compliance Audit to ensure that NBFCs comply with the latest amendments and regulation frameworks because this will help NBFCs avoid legal challenges to ensure that NBFCs operate within the premises of the law.

Risk Mitigation and Management

Our NBFC Audit services focus on identifying potential risks to mitigate in the NBFCs by conducting a thorough risk assessment to strengthen your risk management strategies and ensure the financial regulatory auditing to minimize the financial discrepancies.

Strategic Decision Support

The report prepared by our experts goes beyond compliances and offers valuable insights into the strategic decision-making process of NBFCs. Our NBFC Audit services help the NBFC focus on strengths and weaknesses to assist in making informed decisions.

Investor’s confidence building

Successful NBFC Audits help attract potential investors and their trust, so our NBFC Audit services contribute to building investor confidence by providing accurate information about the NBFC.

Long term Growth

Our NBFC Audit Services' primary focus is on long-term growth by ensuring compliance, mitigating risk, and maintaining operational efficiency to contribute to long-term sustainability and growth.

Different types of Audits to NBFC by our NBFC Audit Services

NBFC Statutory Audit

Enterslice NBFC Audit Service serves a specific purpose in NBFC Statutory Audit to ensure the financial statement complies with accounting standards and legal regulations laid down by the regulatory authorities. NBFC Statutory Audits are mandatory under the Companies Act, 2013 and the RBI regulations for NBFCs.

NBFC Internal Audit

NBFC Audit Service complies with guidelines issued by the RBI on risk-based internal audit, making the NBFC internal audit an important aspect to focus on to evaluate and improve internal risk management and operational efficiency of the NBFC to mitigate the risk. Our team helps perform internal audits and internal controls.

NBFC Concurrent Audit

Our NBFC Audit Services ensures that the NBFC concurrent audit is performed as per the RBI to help in the early detection of irregularities and fraud by examining the financial transactions that are examined at the time of the performance of the transactions to warn the banks to prevent fraud.

Regulatory NBFC Compliance Audit

Our NBFC Audits Services perform regulatory NBFC compliance audits to focus on ensuring adherence to the regulations set by the financial regulatory authorities, such as RBI or banking regulations, assets classifications, etc., for the NBFC to maintain the smooth functioning of the NBFC by maintaining the records, data etc.

Duties and Responsibilities of NBFC Auditors

The duties and responsibilities of the auditor in NBFC have to be followed to maintain the accuracy of the company and present accurate data to potential investors and the market.

Ensure Compliance with Reports as per RBI Directions

The RBI regulators have increased the responsibility of the auditors because when reporting to the board of directors on a certain matter, the auditor needs to be very careful while carrying out NBFC audits. All the required matters have been taken into consideration to report to the RBI and comply with the laws and regulations. The auditor is required to incorporate as stated under section 1A of Section 45MA of the RBI, Act 1934 and all of the powers enabling it in this are given in the RBI directions for NBFCs. Our team of professionals provide the role of NBFC Auditors in our NBFC Audit Services to regulate the responsibility of the auditor.

Reporting and Communications

The auditors need to provide clear and concise reports to management and regulatory bodies of NBFC about the functioning, strategies, policies, etc., to maintain the smooth functioning of the NBFC Compliance Audit. There should be communication and reporting among the members of the NBFC to maintain harmonization. They also need to communicate audit findings, recommendations, and any significant issues identified during the audit process. Our NBFC Audit services maintain the reporting and communication with the members of the NBFC.

Independence and Objectivity

The auditor maintains independence and objectivity throughout the audit process to ensure unbiased assessments. Our NBFC audit Services also disclose any potential conflicts of interest to maintain harmony in the management and operations of the NBFCs.

Professional Development

Enterslice provides the NBFC Audit Services with experienced auditors to keep the management of the NBFC updated on changes in the auditing standards, regulations and industry best practices and continuously improve their knowledge and skills to maintain the growth of the NBFC in the financial market. The up-to-date system will help the NBFC prevent risks and comply with the latest regulations and requirements.

NBFC Audit Services emphasizes Financial Regulatory Auditing for NBFC

Our NBFC Audit Services emphasize comprehensive Financial Regulatory Auditing in an ever-evolving financial landscape and regulatory compliances, and our team of experts adapts and navigates the financial regulations governing NBFCs by examining financial statements, internal control assessment, operational management to ensure that the NBFCs meet the regulatory standards and operate transparently with integrity. Our team of experts is designed to identify potential non-compliance by conducting an NBFC Compliance audit to mitigate risk and maintain efficiency in the financial market. NBFC's role is to focus on the credit demands of companies or organizations to work in the competitive market. However, our team of experts provides NBFC Audit Services to overcome the challenges.

NBFC Audit Services roles to NBFC in Net Owned Funds

Raising Capital

If the Net Owned Funds fall below the required levels, then the NBFC Audit Services will help in taking measures to raise additional capital through various means, such as issuing new shares, retaining earnings or other capital infusion methods. NBFC Audit Services helps the NBFC companies striving to achieve the capital requirements in compliance with NBFC Compliance Audit and financial Regulatory Auditing for NBFC because any failure to achieve the minimum net owned funds limits within the stated time will not be eligible to hold the Certificate of registration as NBFC and the RBI, will cancel the Certificate of registration against such NBFCs.

Regular Monitoring

NBFC Audit Services are provided to regularly monitor their net-owned funds to ensure compliance with the minimum prescribed levels set by regulatory authorities, and RBI lays down the policies, issue directions, supervise and regulate NBFC to provide the Certificate of registration and function smoothly as finance companies. The NBFC Audit Services ensures monitoring of the use of funds in the market to maintain the capital requirements and fit eligible as per the RBI guidelines to run as NBFCs. The NBFC should monitor and report the status of any fraud regularly to mitigate the risk of facing any penalties.

Stakeholder Communications

The NBFC Audit Services perform communications with stakeholders to maintain the Net Owned Fund because it is a crucial parameter for NBFC as it represents the ownership capital available to the company, and complying with Net Owned Funds is crucial for NBFC to ensure financial stability and regulatory adherence by the stakeholders. The NBFC Audit Services provides financial regulatory auditing for the NBFC to check on changes in regulatory compliance. Then, the NBFC have to immediately communicate with the stakeholders to follow the prescribed changes in Net Owned Funds, or if there is any fall in the NOF, then again, the NBFC communicate with stakeholders to comply with the prescribed limit. 

Role of NBFC in Developing Indian Economy by Our NBFC Audit Services

Due to the limited access to mainstream funding in the sector, the NBFC has huge opportunities in the MSME small loan credit markets. The NBFC Audit Services works as a credit channel for micro and small business to fulfil their credit needs by developing various innovative and tailored financial products to meet the demands of the NBFC. Our NBFC Audit Services ensure that the NBFC is governed by different sets of regulations prescribed by the RBI with fewer compliance requirements and with an easy structure and business processes of NBFC, the branch outreach is high, and they can provide timely and flexible repayment terms based on cash flow assessments. The other businesses, such as infrastructure finance, assets finance, etc., are microfinance, which has been a key area of operations for NBFC, and it plays a supportive role in the economy as well as in financial inclusions, which needs to be encouraged. In conducting audits of Non-Banking Financial Companies (NBFCs) for economic development has been given due consideration. NBFC provides financial services to unbanked and underbanked individuals, small and medium-sized enterprises, and other businesses that are not served by traditional banks for their growth in this competitive world.

Our NBFC Audit Services guide in conducting an NBFC Audit

Step 1: Understanding Business Operations

Our NBFC Audit Services consult the Memorandum of Association and Article of Association of the NBFC to ascertain the nature of work, and our team of experts in Enterslice review the board and committee meeting minutes and with higher level management to have a better understanding of the duties performed by the NBFCs.

Step 2: Internal Control Evaluation

Our NBFC Audit services provide an assessment of the company's internal control system, which includes upholding the system, implementing various internal control measures within the company, assisting with decisions, identifying fraud, etc., and our professional auditor evaluates the efficiency of the company’s internal control system.

Step 3: Requirements for Registrations

NBFC Audit Services helps NBFC obtain the Certificate of registration before starting their business under Section 45-IA of the RBI Act. If they have a minimum net-owned fund of Rs 2 crore, then the auditor acquires a copy of the company's Certificate of registration by performing NBFC Compliance Audit.

Step 4: Regulatory Compliance Review

Our NBFC Audit Services help in classifying the kind of company to determine whether it complies with the relevant regulations, such as a loan company, investment company, financing company, etc., by performing financial regulatory auditing and NBFC Compliance audit of the respective companies.

Step 5: Asset Quality Review

Asset quality is the most critical parameter, where asset quality is dependent on the asset class in which NBFC operates and is based on review sources such as investments, accounting standards, asset categorization, norms, etc. Our NBFC Audit Services examines whether the company conforms to the prescribed laws or norms.

Step 6: Audit Documentations

The audit reports and the audited financial transaction reports are required to be submitted at the time of incorporation so our NBFC Audit Services maintain proper Paper works for the smooth functioning of the NBFC in the market and attract more potential investors.

Step 7: Documents Required

The Documents required a Memorandum of Association, Article of Association, details of directors, business plans, shareholders, promoters, audited financial statements and detailed infrastructure project reports. All these Documents are prepared by the professionals in our NBFC Audit Services.

Step 8: Approval of Certificate of Registration

After completing all the requirements and procedures, the RBI will issue a Certificate of Registration to operate a Non-Banking Financial Company.

Step 9: Operational Commencement

After obtaining the Certificate of Registration, the Non-Banking Financial Company can commence their operation with approved business plans.

NBFC Audit Service of Internal Control Assessment in NBFC Audit

Our NBFC Audit Services evaluates your internal control assessment system to identify weaknesses and propose improvements to enhance the efficiency and reliability of your financial operations. The qualifications regarding the auditor for conducting an NBFC audit are provided under Section 138 (1) of the Companies Act, 2013, where the auditor assesses the company’s internal control system and their duties include upholding an appropriate system and then implementing various measures to assist in the fast decision making, identifying fraud or weaknesses etc. NBFC Audit Service by our experts to evaluate the design and implementation of the internal control assessment system of the NBFC. We test the effectiveness of internal controls related to financial reporting and identify and assess the risk of material misstatement in financial statements. Our experts provide recommendations or strategies for strengthening internal controls.

Challenges during the NBFC Audit

Regulatory Challenges

The RBI issues a new regulatory framework for NBFC and plays a crucial role in regulating the NBFC sector, which will make it challenging to comply with the changes made by the RBI all the time in a limited time. The pace of regulatory challenges is rapidly growing, which places a considerable burden on NBFC and will also make it challenging to keep up with the continuous growth of standards, laws, and regulations. A weak compliance culture will make the conduct of employees bad and retain the growth of the NBFCs.

Concurrent Audit Challenge

Conducting concurrent audits in real-time can be demanding and requires auditors to manage a continuous review of transactions and operations because it is a systematic examination of financial transactions regularly to ensure accuracy, authenticity, and compliance with procedures and guidelines. It works as a bank's early warning system to ensure timely detection of irregularities or any fraud activities, which will put the burden on the auditor to keep on focusing on a single area.

Diverse Business Models

The RBI categorizes NBFC into various layers, such as those engaged in the business of loans and advances, acquisitions of shares or stocks, debentures, etc., issued by the government or other authorities, which means a company's planned for making profits and the diverse area of the business plan make it easy for the comply to comply. Enterslice ensures that NBFC does not fail to comply with regulatory requirements and provides a framework to manage regulatory requirements.

NBFC Compliance Audit Services to ensure Regulatory Adherence with Enterslice

The NBFC Compliance Audit service is designed to offer a comprehensive understanding of the NBFC Compliance audits, which play a critical role in maintaining the financial integrity, legal compliance, and overall stability of non-banking financial entities. Our key NBFC Audit Services include:

Regulatory Understanding

Our NBFC Audit Services possess a deep knowledge of the regulations governing non-banking financial companies. This includes thorough financial regulatory auditing for NBFCs to maintain financial strategies for your NBFCs and present an accurate report to the investors. It also focuses on legal obligations to govern the NBFCs to comply with the laws and regulations.

Expertise in Financial Regulatory Auditing

The NBFC Audit Services is provided by experts with extensive experience in navigating the complexities of the NBFC regulations by examination to reduce the risk of legal and financial discrepancies.

Comprehensive Audits

Our NBFCs Audit Services cover a wide range of areas to perform, such as statutory audit, internal audit, financial and regulatory auditing, etc., to ensure that all the auditing complies with the regulatory standards to maintain the accuracy and smooth functioning of the NBFCs to attract more investors and work efficiently.

Strategies to mitigate the risk

Apart from the compliance part, our NBFC Audit Services focus on identifying risks related to non-compliance, and this will help the NBFCs adopt robust risk management strategies to safeguard the financial stability and reputation in the market. 

Addressing challenges

Our key NBFC Audit Services acknowledge the common challenges faced by the NBFCs in terms of compliance and financial stability, so our team of experts provide a practical solution to overcome the challenges.

Mitigate a Risk by performing Audits in a Non-Banking Financial Company

The credit risk in lending is the possibility of borrowers defaulting on their loan repayments, and this risk is mostly present in digital lending to mitigate credit risk. Enterslice helps NBFC assess the accurate report of credit records of the borrowers by using credit assessment models to evaluate repayment capacity, credit history, and all the required factors of the borrowers. Enterslice informs NBFC about market trends and economic developments to diversify their lending portfolios. Our NBFC Audit Services provides cybersecurity measures and recovery plans to mitigate operational risks and conducts regular audits and assessments to identify potential risks and implement risk mitigation strategies to sustain the functioning of the NBFCs.