RBI Compliance for NBFC

The Reserve Bank of India (RBI) has regulations for non-banking financial companies (NBFCs), which can change depending on circumstances. It's crucial for NBFC management to be aware of and up-to-date with these regulations.
 

To operate legally in India, non-banking financial companies (NBFCs) must comply with certain annual requirements set by the Reserve Bank of India (RBI). These requirements include:

• Submission of Annual Financial Statements: NBFCs must submit their annual financial statements, such as the balance sheet and profit and loss account, to the RBI within six months from the end of the financial year.
• Filing of Annual Returns: NBFCs must file an annual return with the RBI within 30 days from the end of the financial year. The return should include details of the company's financial position, business, and operations.
• Submission of Statutory Audit Report: NBFCs must get their accounts audited annually by a chartered accountant. The audit report must be submitted to the RBI within three months from the end of the financial year.
• Submission of Statutory Liquid Assets: NBFCs must maintain a certain percentage of their net demand and time liabilities as statutory liquid assets, as prescribed by the RBI. They must submit a statement of statutory liquid assets to the RBI within 15 days from the end of each quarter.
• Compliance with the Fit and Proper Criteria: The RBI has set certain fit and proper criteria for appointing directors and key managerial personnel in NBFCs. NBFCs must ensure that they comply with these criteria at all times.
• Compliance with Other Regulations: NBFCs must also comply with other regulations and guidelines issued by the RBI from time to time, such as those related to customer protection, asset classification and provisioning, and capital adequacy.

NBFCs can be categorized based on their liabilities and activities:

Based on Liabilities:

• Deposit accepting NBFCs
• Non-deposit accepting NBFCs
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Based on Activities:

• Infrastructure Debt Fund NBFC (IDF-NBFC)
• Investment and Credit Company (ICC)
• Non-Operative Financial Holding Company (NOFHC)
• Microfinance Companies (MFIs)
• Mortgage Guarantee Companies
• Infrastructure Finance Company (IFC)
• Core Investment Company (CIC)

Annual Compliance:

Monthly Compliance:

Periodical Compliances:

NBS-1 Return: NBFCs that accept public deposits must submit this return every quarter. Its purpose is to gather financial details such as profit and loss, exposure to sensitive sectors, and more.

• NBS-2 Return: NBFCs accepting public deposits must file this return every quarter to report on prudential norms compliance.
• NBS-3 Return: This quarterly return contains information on the statutory investment in liquid assets for all NBFCs.
• NBS-4 Return: This annual return is filed by any NBFC that had its certificate of a registration canceled. It was previously known as NBS-5.
• NBS-6 Return: Monthly return filed by NBFCs accepting deposits, with total assets of ₹100 crores or more.
• Half-Yearly ALM Returns: NBFCs that accept public deposits of over ₹20 crores and have assets greater than ₹100 crores must file this return.
• Audited Balance Sheet and Auditor's Report: This is another report that NBFCs must file, containing their audited balance sheet and auditor's report.
• Branch Information Return: Every NBFC accepting public deposits must submit this quarterly return, containing information about their branches.