Harun Raaj & AssociatesHarun Raaj & Associates
+91 93008 97008Contact
Business Finance & Credit

NBFC Registration — RBI CoR Application

NBFC Registration

Start — upload documents, pay when ready →Talk to a CAWhatsApp us
SCOPEConfirmed in writing

Regulatory Framework

RBI Act, 1934: Section 45-IA mandates that no Non-Banking Financial Company (NBFC) shall commence or carry on the business of a non-banking financial institution without obtaining a Certificate of Registration (CoR) from the Reserve Bank of India. Under the Scale Based Regulation (SBR) framework for NBFCs (RBI/2021-22/112, DOR.CRE.REC.No.60/03.10.001/2021-22, effective 1 October 2022), a new NBFC applicant must hold a minimum Net Owned Fund (NOF) of ₹10 crore to be eligible for CoR — a threshold applicable at entry, before the four-layer classification (Base, Middle, Upper and Top Layer) under SBR determines the intensity of ongoing prudential regulation applicable post-registration. The CoR application is filed online via RBI's COSMOS portal along with statutory documents (certificate of incorporation, MOA/AOA, audited financials, net-worth certificate, board resolution, and business plan), and RBI evaluates the application against Section 45-IA's fit-and-proper and financial-viability criteria before grant. This registration threshold and process form the entry point to the same SBR regime under which our ongoing NBFC compliance services (regulatory returns filing and SBR-tier compliance) already operate.

Overview

NBFC registration is the licensing of a non-banking financial company under the Reserve Bank of India Act 1934 — the application to the RBI under Section 45-IA for the certificate of registration to carry on the business of a non-banking financial institution. The RBI grants the CoR where the company meets the conditions: the minimum net owned funds, the fit and proper management, and the business model that fits the applicable framework — and the registered NBFC then operates under the RBI's directions, the prudential norms and the reporting, with the scale-based regulation the RBI has introduced for the sector.

The NBFC is the company whose business is the lending or the financial services, and the RBI registration is what makes that business lawful. The company that carries on the NBFC business without the registration is operating in violation of Section 45-IA — the registration is not a formality but the licence of the business. The application is a serious one: the business plan, the financials, the management, the net owned funds, the fit and proper declarations — each tested by the RBI before the certificate issues.

The cost of an unregistered NBFC is the regulatory action: the RBI's directions to cease the business, the penalties, and the business that cannot operate lawfully at all. The registration is the entry ticket to the lending business, and the process is demanding precisely because the business is regulated.

This service is for companies seeking NBFC registration or acquiring an NBFC. We assess the eligibility and the net owned funds position under the RBI Act, prepare the application with the business plan, the financials and the fit and proper declarations, manage the RBI process and the queries, and set up the post-registration compliance — the prudential norms, the reporting, the scale-based regulation — so the NBFC operates within the framework from day one.

How It Works

  1. 1

    Eligibility & Structure Review

    We assess the eligibility, the net owned funds and the business plan.

    Harun Raaj & Associates does this1 week
  2. 2

    Application Preparation

    We prepare the application with the financials and the fit and proper declarations.

    Harun Raaj & Associates does this2-4 weeks
  3. 3

    RBI Submission & Queries

    We file the application and manage the RBI's queries and the process.

    Harun Raaj & Associates does this2-6 months
  4. 4

    Certificate of Registration

    We obtain the CoR and the registration details.

    GovernmentAs per RBI
  5. 5

    Post-Registration Compliance

    We set up the prudential norms, the reporting and the scale-based regulation.

    Harun Raaj & Associates does thisOngoing

Frequently Asked Questions

What is the minimum net owned fund required to register an NBFC with the RBI?
Under the Reserve Bank of India Act 1934, specifically the Master Direction — Non-Banking Financial Company — Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions 2016 (updated via RBI circular DOR.CRE.REC.No.60/03.10.001/2021-22 dated October 22, 2021), the minimum Net Owned Fund (NOF) for a new NBFC-ICC (Investment and Credit Company) is ₹10 crore. For NBFC-MFIs, the minimum NOF is ₹5 crore (₹2 crore for the North-East region). NOF is defined as paid-up equity capital plus free reserves minus accumulated losses and intangible assets, after deducting investments in subsidiaries and group companies as specified in the Master Direction. The funds must be held in a fixed deposit with a scheduled commercial bank and a certificate of deposit must be submitted with the RBI application.
Which activities require mandatory NBFC registration and which are exempt from RBI registration?
Under Section 45-IA of the Reserve Bank of India Act 1934, any company that is a 'financial institution' — whose principal business is receiving deposits or lending or financing — must obtain a Certificate of Registration (CoR) from the RBI before commencing NBFC operations. The 'principal business criteria' is met if more than 50% of total assets are financial assets AND more than 50% of gross income is from financial assets, per RBI's clarification in its 1998 press release. Entities exempt from RBI registration include Housing Finance Companies (regulated by NHB under the National Housing Bank Act 1987), Insurance companies (IRDAI), Stock Brokers (SEBI), Merchant Bankers, and Venture Capital Funds. Companies lending only to group entities, or holding equity investments without lending, may not cross the principal-business threshold and thus may not require CoR — this must be assessed entity-by-entity.
How long does the RBI registration process take and what documents are submitted?
The RBI processes NBFC applications through its Regional Office under Section 45-IA of the Reserve Bank of India Act 1934, and the typical processing time from submission of a complete application is 90 to 180 days, though complex cases or those requiring additional information can take longer. The application is submitted online through the COSMOS portal along with hard copies, and must include: Certificate of Incorporation and Memorandum & Articles of Association (with financial services as the main object), audited financials for the last three years (or since incorporation), a banker's report confirming NOF, a business plan for three years, KYC documents for all directors, a CIBIL report for directors and promoters, and a declaration of no criminal proceedings. If any director is a wilful defaulter or on RBI's caution list, the application will be rejected. We coordinate the COSMOS upload, the physical submission to the relevant Regional Office (Mumbai for most applicants), and respond to RBI queries during processing.
What ongoing compliance obligations apply once an NBFC receives its Certificate of Registration?
Post-registration, an NBFC must comply with the RBI's Master Direction — Non-Banking Financial Company — Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions 2016 on a continuous basis, including: filing NBS-7 (quarterly statutory return on capital funds and risk-weighted assets), NBS-9 (monthly return for NBFC-D above ₹100 crore), and the annual return on COSMOS. Capital adequacy must be maintained at a minimum CRAR of 15% under the Scale Based Regulation (SBR) framework introduced by RBI circular DOR.CRE.REC.No.60/03.10.001/2021-22. The Fair Practices Code under RBI Master Circular DNBS.CC.PD.No.266/03.10.01/2011-12 must be adopted, and the board must constitute a committee for reviewing the same. NBFC-BL (Base Layer, below ₹1,000 crore) entities face lighter compliance than NBFC-ML (Middle Layer) entities, which require an Internal Capital Adequacy Assessment Process (ICAAP) from FY 2026-27 onwards.
Can an existing private limited company convert into an NBFC, or does a new company need to be incorporated?
An existing private limited company can apply for NBFC registration under Section 45-IA of the Reserve Bank of India Act 1934 provided its Memorandum of Association includes financial services — specifically money lending, investment, or hire purchase — as the main object clause. If the existing MoA does not include these objects, an alteration is required under Section 13 of the Companies Act 2013 with a special resolution and ROC filing via Form MGT-14. The company must then build up NOF to the required threshold (₹10 crore for NBFC-ICC) and convert its existing operations or assets to the financial-asset-dominant structure that satisfies the principal-business criteria. It is often more efficient to convert an existing dormant or shell company than to incorporate a new entity, as it avoids the three-year audited financials gap — though the RBI does accept applications from newly incorporated companies with even one year of accounts if accompanied by a robust business plan.

Ready to get NBFC Registration — RBI CoR Application?

File a request in under 2 minutes. Our team contacts you within 24 hours.

Start — upload documents, pay when ready →