NBFC Annual Compliance

Non-Banking Financial Companies are registered under the Companies Act 2013, and are involve in the business of receiving deposits, loans and advances, acquisition of stock/bonds/shares, debentures and securities issued by the government.

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Overview of NBFC Compliance

Lately, RBI compliances have become more complex for NBFCs. There used to be a time when Non-Banking Financial Companies enjoyed benefits over banks. There was a time when NBFCs compliances were far simpler and lenient but after Sahara case, RBI has drafted new compliances for NBFCs and keep them under their screening. A portion of the significant rules are Securitization of Standard Assets and Guidelines for Private Placement of NBFCs. RBI is continuing putting forth attempts for preventing theory in NBFCs .

Non-Banking Financial Companies are registered under the Companies Act 2013, and are involve in the business of receiving deposits, loans and advances, acquisition of stock/bonds/shares, debentures and securities issued by the government. NBFCs are actively involved in the financial activities and are registered by the Reserve Bank of India. No NBFC can run their business without receiving the license from Reserve Bank of India.

Term ‘Principal Business’ in NBFC

The term ‘Principal Business’ stands for those financial activities where a company’s financial assets comprises of more than 50 percent of the total assets and income from financial assets derive is more than 50 percent of the gross income. Any company who fulfils both these criteria is eligible to be registered as NBFC. However, the term principal business is not defined by the RBI but RBI has make it clear that companies which are involve in financial activity can be registered and supervised by RBI. Hence, those companies which perform activities related to agriculture, sale and purchase of goods, construction of immovable property, sale of immovable property, industrial activity cannot be regulated and supervised by RBI because they do not fall under the criteria of NBFC.

What are the Regulations applicable on non-deposit accepting NBFCs whose asset size is less than ₹ 500 Crore?

In the event that the NBFCs have not obtain any access to public funds and don't have any client interface will not be exposed to any guideline either prudential or lead of business guidelines.

NBFCs having client interface will be exposed uniquely to lead of business guidelines including FYC, KYC, if they are not getting access to public funds. As though they are getting to the open assets, they will be exposed to restricted prudential guidelines.

NBFCs which are associated with both open assets and client interface exist are exposed to both limited prudential and business guidelines.

Annual Compliance

  • NBS-9-Filling of Return with RBI

    NBFCs-ND file for NBS-9 and that’s too in case where there asset size is less than Rs 100 crore.

  • Convene Statutory Meeting

    Statutory Meeting is convened so as to accord the investors an open door for seeing what level of progress has accomplished the floatation of the organization and all together that any uncommon issues requiring their endorsement might be laid before them.

    The statutory gathering is held to advise the investors on the matters identifying with incorporation, allocation of offers, contracts went into by the organization, use of assets and so on.

  • Maintenance of Accounts

    Books of accounts including vouchers and receipts are required to be kept up under various legal laws – Income Tax Act, Companies Act 2013 and GST Act. Books to be kept up, maintenance period and compulsion necessities are distinctive under all the 3 laws.

  • GST Return Filing

    A return is a record containing subtleties of pay which a citizen is required to file with the tax administrative authorities. This is utilized by tax authorities to ascertain tax obligation.

    Under GST, an enlisted vendor needs to record GST returns that include:



    GST (On sales)

    Input tax credit (GST paid on purchase)

    GST file return cannot be filed without sales and purchase invoices.

  • Income Tax Return Filing

    An Income tax return (ITR) is a structure used to record data about your pay and expense to the Income Tax Department. The expense risk of a citizen is determined dependent on their salary. In the event that the return shows that an excess amount of tax has been paid during a year, at that point the individual will be qualified to get an income tax refund from the Income Tax Department.

    According to the income tax laws, it is essential to file return each year by an individual or business that gains any income during a monetary year. The pay could be as compensation, business benefits, pay from house property or earned through profits, capital additions, premiums or different sources.

    It is necessary for all the NBFCs incorporated under the Companies Act, 1956 to file their annual financial statement with MCA.

  • Annual Return Filing

    Form AOC-4 NBFC (IND AS) & MGT-7 is used to file annual return with Registrar of Companies (ROC) within 30 days & within 60 days from conclusion of annual general meeting respectively.

Event Based Compliances

  • Change in Directors/ Registered Office/ Capital Structure

    The process of change in directors/ registered office or any alteration in the capital structure is similar to that of ROC. To make any amendments in the above mentioned profiles all you have to do is adhere to the rules and regulations.

  • FDI

    NBFCs allow 100% Foreign Direct Investment under automatic route but in some cases FDI is restricted.

Essential NBFC compliance Checklist for Non-Deposit and Deposit-taking Company

In the Case of Annual Compliance

  • Unaudited March Monthly return/NBS-7 on or before 30th June
  • Statutory Auditors certificate on Income and assets with the time limit on or before 30th June
  • Information about companies having FDI/Foreign Funds with the time limit on or before 30th June
  • Audited March monthly return/NBS-7 filed upon completion
  • File audited annual balancesheet and P&L Account with the time limit of one month from the date of signoff
  • Resolution of Non-Acceptance of Public Deposit with the time limit of before the commencement of the new Fiscal tear
  • Declaration of Auditors to Act as Auditors of the Company on annual basis

Monthly Compliance

  • Monthly return by 7th of every month

Periodical Compliances

  • Appointment of Director time limit is within 30 days of appointment
  • Resignation of Director (DIR-12+ challan report) with the time limit of within 30 days of appointment
  • Adoption of any notification in the ensuing Board Meeting and filing the certified copy with RBI

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