RBI Compliance Checklist for NBFCs
Non-Banking Financial Companies are registered under the Companies Act 2013 and engage in activities such as accepting deposits, loans, and advances. Purchasing government-issued bonds, shares, debent
Non-Banking Financial Companies are registered under the Companies Act 2013 and engage in activities such as accepting deposits, loans, and advances. Purchasing government-issued bonds, shares, debent
Like banks, the RBI also has rules for NBFCs. But these rules keep changing according to the situation and circumstances. The managers and directors of an NBFC must be aware of these rules and keep up-to-date with them. According to the Reserve Bank of India (RBI), non-banking financial corporations (NBFCs) must adhere to specific annual requirements to operate in India legally. These include:
According to Master Direction, both an NBFC-NDs-SI deposit company and an NBFC-SI deposit company must file refund claims.
Nonbank Financial Companies that receive public funds must submit an audited balance sheet and report annually. Branch Data Recovery: Every NBFC managing public funds must deposit quarterly refunds back into their branch data recovery account to reimburse expenses incurred while managing public funds. Submission of Annual Statements and Returns is also mandatory.
Non-deposit NBFCs must submit annual statements of capital funds, risk assets, and ratios digitally or physically for submission. Furthermore, capital adequacy norms were codified into the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007 to ease disclosure norms outlined within them.
Exposure to the real estate sector both directly and indirectly. Maturity Patterns for assets and liabilities
As stated above, once you get an NBFC License, it is your obligation to follow its enforcement. Please do so to avoid severe fines or even the closure of your business.
Dobizindia Business Solution Pvt. Ltd.'s consultant can completely comply with NBFCs and ND-SIs' obligations as they pertain to compliance issues. NBFC-ND-SI is required to file specific reports.
Asset-Liability Management Returns refer to the number of returns submitted by NBFCs-ND-SI periodically, as described below:
NBFCs usually raise money through banks or sell business papers as shared assets to raise capital, then lend the cash raised as loans to small and medium businesses, retail clients, etc.
Banks are known as Banking and Financial Companies (BFCs), while LICI of India (LIC for short) is considered an NBFC. Banks specialize in deposit and lending issues, while LIC primarily provides life insurance protection coverage to its beneficiaries.
NBFC stands for nonbank financial institutions that act like banks but operate outside of them in rural regions. In contrast, MFI stands for miniature-scale account establishments that work less efficiently than their NBFC counterparts by granting small loans to less fortunate members of society, allowing them access to resources necessary for survival.
A fundamentally significant nonbank monetary organization (NBFC-NDSI) is characterized as any nonbanking monetary organization not enduring open stores and having full-scale assets of Rs. The evaluation includes those banks with sizes far exceeding 2% of GDP as examples of systemically important institutions.
NBFCs can offer various services, including loans and credit facilities, currency exchange, retirement planning services, money market trading services, underwriting of securities transactions, and merger activities.
Home loans offered by nonbank financial companies (NBFCs) typically fall within the prime lending rate framework. Banks do not permit lending under their monthly credit loan ratio values, while Nonbank Financial Services have more flexibility to do this, sometimes benefiting clients by providing lower loan fees!
More Compliances In addition to those before outlined, more compliances under the Companies Act 2013 that all NBFCs PAN-India must observe include the following:
Holding the Regulatory Registers, Drafting Financial Statements, Convening Statutory Meetings, Filing Income Tax Returns (ITR), and Filing AOC-4 Financial Statements
Also, any changes or amendments made by Apex Bank to the guidelines provided above will be reported by the Reserve Bank of India within one month of their effective date.
Additionally, to comply with RBI for NBFCs with PAN-India registrations, more rules are provided by RBI for PNBFCs with national registrations in Chapter IV of the Master Director, known as Prudential Regulations. They should be strictly observed by all NBFCs operating across India. Compliance with this governmental legislation is mandated in the following ways:
An NBFC's principal business can generally be defined as any financial activity in which financial assets make up at least 50% of total assets and associated income exceeds 50% of gross income for any particular company. Achieving both criteria qualifies a company to register as an NBFC with the RBI. However, principal business is not explicitly defined; the RBI has clarified that companies engaged in financial activities will be registered and monitored. So companies involved with agriculture-related activities, sales or buying of goods, construction or sale of immovable property, industrial activity, etc. do not fall within its purview as NBFCs.
Below is provided an annual NBFC compliance checklist for both non-deposit and deposit companies. See:
S.No. | Particulars | Time Limit |
---|---|---|
Annual Compliances | ||
1. | Undiscovered March Return/NNBS-7 Return | On or before June 30 |
2. | Statutory Auditors Certificate of Income and Assets | On or before June 30 |
3. | Details of companies with FDI or Foreign Funds | On or before June 30 |
4. | Inspected return for March/NNBS-7 | Upon completion |
5. | The audited file of the annual balance and P&L Account | One month from the date of signoff |
6. | Reconciliation of a Public Deposit Rejection | Before the commencement of the new Financial year |
7. | Announcement of Auditors to the Annual Audit Company | Annual basis |
Monthly Compliance | ||
1. | Monthly Return | By the 7th of each month |
2. | Upload Monthly Return | By the 7th of each month |
Periodical Compliances | ||
1. | Appointment of Director (Appendix-III) | Within 30 days of the appointment |
2. | Resignation of Director that is DIR-12 + Challan report | This must be done within 30 days of the appointment. |
3. | Receipt of any notice at the next Board Meeting and filing a certified copy with the RBI |
Applied for startup recognition certificate, work done in scheduled time with good coordination of teamThank u
Cameron Williamson
Applied for startup recognition certificate, work done in scheduled time with good coordination of teamThank u
Cameron Williamson
Applied for startup recognition certificate, work done in scheduled time with good coordination of teamThank u
Cameron Williamson
Applied for startup recognition certificate, work done in scheduled time with good coordination of teamThank u
Cameron Williamson
Applied for startup recognition certificate, work done in scheduled time with good coordination of teamThank u
Cameron Williamson
Applied for startup recognition certificate, work done in scheduled time with good coordination of teamThank u
Cameron Williamson
Applied for startup recognition certificate, work done in scheduled time with good coordination of teamThank u
Cameron Williamson
Applied for startup recognition certificate, work done in scheduled time with good coordination of teamThank u
Cameron Williamson
Applied for startup recognition certificate, work done in scheduled time with good coordination of teamThank u
Cameron Williamson
Applied for startup recognition certificate, work done in scheduled time with good coordination of teamThank u
Cameron Williamson
Applied for startup recognition certificate, work done in scheduled time with good coordination of teamThank u
Cameron Williamson
Applied for startup recognition certificate, work done in scheduled time with good coordination of teamThank u
Cameron Williamson
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