NBFC Compliance

Ensuring Regulatory Compliance of NBFC

  • Register and execute business as per NBFC Compliance

An essential component of India's financial industry is Non-Banking Financial Companies (NBFCs), which offer a variety of financial services such loans, investments, and asset financing. The Reserve Bank of India (RBI) oversees NBFCs in India within the parameters set forth by the Reserve Bank of India Act, 1934. The RBI constantly updates rules and regulations to maintain the stability and integrity of the financial system while encouraging financial inclusion and innovation, creating a dynamic regulatory environment for NBFCs. The regulatory criteria for capital sufficiency, governance, risk management, client protection, and reporting standards are all included in the definition of NBFC compliance in India.

Why should comply with NBFC Compliance?

To safeguard your operations and continuity in the Financial Sector, let’s take a look for its significance.

  • Non-compliance may lead damage to the brand value and reputation.
  • To Comply with the RBI issued directions for the NBFCs for better advancement in the sector.
  • Compliance is significant for preventing systemic risks that may destabilize the financial system.
  • To maintain trust and credibility in the market, NBFCs must comply with the regulations of RBI.
  • Non-compliance of the directions or guidelines issued by the RBI may lead to severe penalties or sanctions.
  • Compliance with the guidelines provides protection to stakeholders by maintaining transparency, integrity and stability.
  • If you’re a new or an existing NBFC governed by RBI and seeks to avoid penalties and build confidence in the market.

Penalties for non-compliance of NBFC compliance

Protect your reputation and confidence by avoiding penalties

  • Licence of a NBFC can be revoked.
  • Public scrutiny of NBFC can be made.
  • Some business activities can be restricted.
  • Non-compliance may also lead to legal action.
  • Monetary penalty or fine may vary based on the extent of violation and financial impact on the stakeholders.

Checklist for NBFC Compliance

Keep your company’s compliance journey on track

  • Implement a robust governance structure.
  • Maintain the required minimum capital adequacy ratio.
  • Formulate and implement a comprehensive risk management policy.
  • Comply with Fair Lending Practice and Code of Ethical Behaviour.
  • Prepare and submit timely and accurate reports.
  • Ensure compliance with data protection and privacy regulations.
  • Provide regular training and awareness programs to employees.
  • Implement internal controls and conduct periodic audits.
  • Prepare required policies and adhere to annual compliances.
  • Stay updated on changes to regulatory requirements.
  • Keep your NBFC registered and licenced with applicable regulatory authority.
  • Establish a mechanism for ongoing monitoring and review of compliance activities.

    How LawDocs can help you?

    We assist, you grow

    • 24*7 expert assistance
    • Service at your ease
    • Free Gap Analysis Report
    • Prepare all required policies and documents
    • Assist you in daily compliance 
    • Advise you for management improvement
    • Assist you in legal formalities
    • Get done NBFC compliance
    • Keep updated of RBI, SEBI, SEC, ICAI, MCA or other applicable regulation

Get expert assistance.

Contact LawDocs to comply with the RBI compliances for your NBFC.

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