RBI Regulations & Compliance for NBFC in India

RBI Regulations & Compliance for NBFC in India . Since the Modi Government came in 2014, Non-Banking Financial Companies (NBFCs) have played a major role in the Indian financial ecosystem by offering credit solutions, asset financing, wealth management, and other financial services. Given their systemic importance, the Reserve Bank of India (RBI) has laid out strict compliance requirements for NBFCs to ensure financial stability, transparency, and consumer protection. Failure to meet these mandatory compliance requirements can result in financial penalties, legal action, and even the cancellation of licenses. Through this article we will provide an in-depth overview of NBFC compliance requirements, categorized into Annual, Half-Yearly, Quarterly, Monthly, and Weekly Compliance obligations.
What is Annual NBFC Compliance?
Annual compliance involves filing essential documents and reports with regulatory authorities to maintain transparency and accountability. Below are the key annual compliance requirements for NBFCs:
1. Statutory Auditor Certificate (DNBS10) – 31st December
(a) Every NBFC must obtain a Statutory Auditor Certificate confirming that it meets the required prudential norms and other RBI regulations.
(b) This certification checks that the financial statements are accurate and comply with the regulatory framework.
2. FATF Compliance Certificate – 30th June
(a) Financial Action Task Force (FATF) compliance ensures that NBFCs comply to anti-money laundering (AML) and counter-terrorism financing (CFT) regulations.
(b) This report must be submitted to regulatory authorities annually.
3. Balance Sheet & Profit/Loss Submission – 30th September
(a) NBFCs must submit their audited financial statements, including the balance sheet and profit and loss account, to RBI by 30th September.
(b) These statements reflect the financial health of the NBFC and help maintain transparency.
4. FEMA & FDI Compliance Reporting – 30th June
(a) If an NBFC receives foreign direct investment (FDI), it must comply with FEMA (Foreign Exchange Management Act) guidelines by filing FCGPR Reporting.
(b) The report must be filed with the RBI to disclose foreign investment details.
5. GST Annual Return (GSTR-9, GSTR-9C) – 31st December
(a) NBFCs registered under GST must file annual GST returns.
(b) GSTR-9 provides a summary of sales, purchases, and tax liabilities for the financial year.
(c) GSTR-9C is a reconciliation statement certified by a chartered accountant.
What is Half-Yearly NBFC Compliance ?
Some compliance requirements need to be fulfilled twice a year. These ensure periodic checks on an NBFC's financial position and risk management strategies.
1. Prudential Norms Reporting (HFCs) – 12th May & 12th November
Housing Finance Companies (HFCs) must report compliance with RBI's prudential norms, covering capital adequacy, asset classification, and provisioning.
2. Loan Securitization & Borrowing Compliance – 30th April & 31st October
(a) NBFCs engaging in loan securitization must report details of such transactions.
(b) This ensures transparency in credit risk transfer and asset-backed financing.
3. ALM-II Liquidity Reporting (Large NBFCs) – 12th May & 12th November
(a) Asset Liability Management (ALM) reporting is essential for large NBFCs to maintain liquidity risk management standards.
(b) ALM-II report monitors cash flows and liquidity gaps.
What is Quarterly NBFC Compliance ?
Quarterly filings ensure ongoing supervision and monitoring of an NBFC’s financial stability and regulatory adherence.
1. Financial Returns (DNBS02) – 21st January, 21st April, 21st July, 21st October
Financial returns include details of income, expenditure, assets, liabilities, and regulatory capital.
2. Capital Adequacy Ratio (CAR) Reports – 31st March, 30th June, 30th September, 31st December
(a) NBFCs must maintain a minimum capital adequacy ratio as per RBI regulations to ensure financial stability.
(b) The CAR report is submitted quarterly to demonstrate compliance with this requirement.
What is Monthly NBFC Compliance ?
Monthly compliance obligations help ensure tax adherence, timely reporting, and regulatory oversight.
1. GST Filing (GSTR-1 & GSTR-3B) – 10th & 20th of Every Month
(a) GSTR-1: A summary of outward supplies (sales) filed by the 10th of every month.
(b) GSTR-3B: A summary of input tax credit and tax liability filed by the 20th of every month.
2. TDS Filing & Payments – 7th of Every Month
(a) Tax Deducted at Source (TDS) must be deducted and deposited with the government by the 7th of every month.
(b) TDS returns should also be filed accordingly.
3. FEMA Foreign Investment Reporting – Monthly
(a) Any foreign direct investment (FDI) transactions must be reported to RBI monthly.
(b) This ensures compliance with FEMA regulations.
What is Weekly NBFC Compliance?
Some compliance requirements are reviewed weekly to prevent financial fraud and maintain customer verification processes.
1. CKYC Reporting for New Customers: Central Know Your Customer (CKYC) reporting ensures that all new customers are verified to prevent financial fraud.
2. FIU-IND Suspicious Transaction Reporting: Financial Intelligence Unit-India (FIU-IND) reporting is mandatory for identifying and reporting suspicious financial transactions.
3. CERSAI Securitization & Asset Reporting: The Central Registry of Securitization Asset Reconstruction and Security Interest (CERSAI) requires NBFCs to report details of securitization transactions to prevent fraudulent lending.
Consequences of NBFC Non-Compliance
Non-compliance with regulatory requirements can result in severe penalties, legal actions, and even cancellation of NBFC licenses. Some of the major consequences include:
1. Financial Penalties: RBI imposes hefty fines on NBFCs that fail to meet compliance deadlines including Non-payment of penalties may lead to further legal complications.
2. RBI/MCA/GST/Income Tax Legal Action: Continuous non-compliance can result in legal action against the NBFC and its key managerial personnel.
3. NBFC License Cancellation: Prolonged non-compliance can lead to RBI canceling the NBFC’s Certificate of Registration, effectively ceasing its operations.
Therefore, NBFCs must diligently follow compliance guidelines set by RBI to maintain financial stability and ensure regulatory adherence. Given the complex and stringent compliance landscape, it is advisable for NBFCs to adopt automated compliance tracking systems or seek professional advisory services to meet their obligations on time.
For expert assistance in NBFC compliance, visit Compliance Calendar LLP for tailored compliance solutions and advisory services. NBFCs must diligently follow compliance guidelines set by RBI to maintain financial stability and ensure regulatory adherence. Given the complex and stringent compliance landscape and advisable for NBFCs to adopt automated compliance tracking systems or required professional advisory services to meet their obligations on time.
For professional assistance in NBFC compliance, connect with Compliance Calendar LLP, a trusted partner for regulatory compliance, legal advisory, and financial services.

Since the Modi Government came in 2014, Non-Banking Financial Companies (NBFCs) have played a major role in the Indian financial ecosystem by offering credit solutions, asset financing, wealth management, and other financial services. Given their systemic importance, the Reserve Bank of India (RBI) has laid out strict compliance requirements for NBFCs to ensure financial stability, transparency, and consumer protection. Failure to meet these mandatory compliance requirements can result in financial penalties, legal action, and even the cancellation of licenses. Through this article we will provide an in-depth overview of NBFC compliance requirements, categorized into Annual, Half-Yearly, Quarterly, Monthly, and Weekly Compliance obligations.

What is Annual NBFC Compliance?

Annual compliance involves filing essential documents and reports with regulatory authorities to maintain transparency and accountability. Below are the key annual compliance requirements for NBFCs:

1. Statutory Auditor Certificate (DNBS10) – 31st December

(a) Every NBFC must obtain a Statutory Auditor Certificate confirming that it meets the required prudential norms and other RBI regulations.

(b) This certification checks that the financial statements are accurate and comply with the regulatory framework.

2. FATF Compliance Certificate – 30th June

(a) Financial Action Task Force (FATF) compliance ensures that NBFCs comply to anti-money laundering (AML) and counter-terrorism financing (CFT) regulations.

(b) This report must be submitted to regulatory authorities annually.

3. Balance Sheet & Profit/Loss Submission – 30th September

(a) NBFCs must submit their audited financial statements, including the balance sheet and profit and loss account, to RBI by 30th September.

(b) These statements reflect the financial health of the NBFC and help maintain transparency.

4. FEMA & FDI Compliance Reporting – 30th June

(a) If an NBFC receives foreign direct investment (FDI), it must comply with FEMA (Foreign Exchange Management Act) guidelines by filing FCGPR Reporting.

(b) The report must be filed with the RBI to disclose foreign investment details.

5. GST Annual Return (GSTR-9, GSTR-9C) – 31st December

(a) NBFCs registered under GST must file annual GST returns.

(b) GSTR-9 provides a summary of sales, purchases, and tax liabilities for the financial year.

What is Half-Yearly NBFC Compliance ?

Some compliance requirements need to be fulfilled twice a year. These ensure periodic checks on an NBFC's financial position and risk management strategies.

1. Prudential Norms Reporting (HFCs) – 12th May & 12th November

Housing Finance Companies (HFCs) must report compliance with RBI's prudential norms, covering capital adequacy, asset classification, and provisioning.

2. Loan Securitization & Borrowing Compliance – 30th April & 31st October

(a) NBFCs engaging in loan securitization must report details of such transactions.

(b) This ensures transparency in credit risk transfer and asset-backed financing.

3. ALM-II Liquidity Reporting (Large NBFCs) – 12th May & 12th November

(a) Asset Liability Management (ALM) reporting is essential for large NBFCs to maintain liquidity risk management standards.

(b) ALM-II report monitors cash flows and liquidity gaps.

What is Quarterly NBFC Compliance ?

Quarterly filings ensure ongoing supervision and monitoring of an NBFC’s financial stability and regulatory adherence.

1. Financial Returns (DNBS02) – 21st January, 21st April, 21st July, 21st October

Financial returns include details of income, expenditure, assets, liabilities, and regulatory capital.

2. Capital Adequacy Ratio (CAR) Reports – 31st March, 30th June, 30th September, 31st December

(a) NBFCs must maintain a minimum capital adequacy ratio as per RBI regulations to ensure financial stability.

(b) The CAR report is submitted quarterly to demonstrate compliance with this requirement.

What is Monthly NBFC Compliance ?

Monthly compliance obligations help ensure tax adherence, timely reporting, and regulatory oversight.

1. GST Filing (GSTR-1 & GSTR-3B) – 10th & 20th of Every Month

(a) GSTR-1: A summary of outward supplies (sales) filed by the 10th of every month.

(b) GSTR-3B: A summary of input tax credit and tax liability filed by the 20th of every month.

2. TDS Filing & Payments – 7th of Every Month

(a) Tax Deducted at Source (TDS) must be deducted and deposited with the government by the 7th of every month.

(b) TDS returns should also be filed accordingly.

3. FEMA Foreign Investment Reporting – Monthly

(a) Any foreign direct investment (FDI) transactions must be reported to RBI monthly.

(b) This ensures compliance with FEMA regulations.

What is Weekly NBFC Compliance?

Some compliance requirements are reviewed weekly to prevent financial fraud and maintain customer verification processes.

1. CKYC Reporting for New Customers: Central Know Your Customer (CKYC) reporting ensures that all new customers are verified to prevent financial fraud.

2. FIU-IND Suspicious Transaction Reporting: Financial Intelligence Unit-India (FIU-IND) reporting is mandatory for identifying and reporting suspicious financial transactions.

3. CERSAI Securitization & Asset Reporting: The Central Registry of Securitization Asset Reconstruction and Security Interest (CERSAI) requires NBFCs to report details of securitization transactions to prevent fraudulent lending.

Consequences of NBFC Non-Compliance

Non-compliance with regulatory requirements can result in severe penalties, legal actions, and even cancellation of NBFC licenses. Some of the major consequences include:

1. Financial Penalties: RBI imposes hefty fines on NBFCs that fail to meet compliance deadlines including Non-payment of penalties may lead to further legal complications.

2. RBI/MCA/GST/Income Tax Legal Action: Continuous non-compliance can result in legal action against the NBFC and its key managerial personnel.

3. NBFC License Cancellation: Prolonged non-compliance can lead to RBI canceling the NBFC’s Certificate of Registration, effectively ceasing its operations.

Therefore, NBFCs must diligently follow compliance guidelines set by RBI to maintain financial stability and ensure regulatory adherence. Given the complex and stringent compliance landscape, it is advisable for NBFCs to adopt automated compliance tracking systems or seek professional advisory services to meet their obligations on time.

For expert assistance in NBFC compliance, visit Compliance Calendar LLP for tailored compliance solutions and advisory services. NBFCs must diligently follow compliance guidelines set by RBI to maintain financial stability and ensure regulatory adherence. Given the complex and stringent compliance landscape and advisable for NBFCs to adopt automated compliance tracking systems or required professional advisory services to meet their obligations on time.

For professional assistance in NBFC compliance, connect with Compliance Calendar LLP, a trusted partner for regulatory compliance, legal advisory, and financial services.