What are the NBFC Compliance’s requirement as per RBI Act
Non-Banking Financial Companies (NBFC) is an important segment of Indian Financial system. It is the heterogeneous group of institution other than commercial and co-operative banks performing financial intermediation in ways such as accepting deposits, making loans and advances, leasing, hire purchase etc. They raise funds from the public directly or indirectly and lend them to ultimate spenders. Loans are advanced to various wholesale and retail traders, small scale industries, self-employedpersons. Eventually they are being recognized as complementary to the banking sector due to their customer oriented services, simplified procedures, attractive rates of return on deposits, flexibility and timeliness in meeting the credit needs of specified sectors etc.
- Working and operations of the NBFC:
The working and operations of NBFC are regulated by the Reserve Bank of India within the framework of RBI Act, 1934 (Chapter III B) and directions issued by it under the Act. As per the RBI Act NBFC is defined as the financial institution which is a company having principal business of accepting deposits under any scheme or arrangement in any other manner or lending in any manner and such other non-banking institution or class of institution as the bank may with the previous approval of the Central Government. It is compulsory for a NBFC to get themself registered with the RBI. This registration authorizes to conduct its business as an NBFC
- Registration Process
The registration process involves submitting of application by the company in the prescribed format to the RBI along with necessary documents. If the RBI is satisfied thet the conditions enumerated are complied with, it issues a Certificate of Registration to the company. Only those NBFCs holding a valid Certificate of Registration can accept/hold public deposits. Some of the important regulation relating to acceptance of deposits by the NBFC’s are:
- NBFC’s are allowed to accept or renew public depositsminimum for 12 months and maximum for 60 months.
- They cannot accept deposits repayable on demand.
- They shall not provide interest rates above the ceiling rate prescribed by RBI from time to time.
- They cannot offer gifts/incentives or any other additional benefit to the depositors.
- They should have minimum investment grade credit rating.
- Their deposits are not insured.
- The repayment of deposits by NBFCs is not guaranteed by RBI.
- Compliances related to NBFC:
Compliances related to NBFCs:
| MONTHLY COMPLIANCES | ||
| Form Name | Purpose of the Form | Department |
| submitted by all NBFC-NDSIs(Non-Deposit taking NBFCs) | ||
| Monthly Return | Monthly Return on NBFC-ND-SI with asset size of Rs.100 CR. & above | RBI |
| NBS_ALM-1 | Statement of Short term dynamic liquidity(Within 10 days of the close of the Month) | RBI |
| provided by all Non-Banking Financial Companies which are accepting / holding public deposits having asset size above Rs. 100 crores or having public deposits of Rs. 20 crores and above: | ||
| NBS-6 | Monthly Return regarding Exposure To Capital Market | RBI |
| QUARTERLY COMPLIANCES | |||||
| Form Name | Purpose of the Form | Department | |||
| provided by all NBFC’s accepting / holding public deposits, and MNBCs – except Residuary Non-Banking Companies: | |||||
| NBS 1 | Quarterly Return on Important Financial Parameters of Deposit Taking NBFCs | RBI | |||
| NBS -2 | Quarterly Statement of Capital Funds, Risk Assets/Exposures and risk assets Ratio. | RBI | |||
| CA & CEO certificate for NBS-2 | Certifying NBS-2 | RBI | |||
| NBS 3 | Submit quarterly return reading Statutory Liquid asset | RBI | |||
| submitted by all Residuary Non-Banking Companies: | |||||
| NBS 3A | Quarterly Return on Statutory Liquid Assets | RBI | |||
| Quarterly Return I | Return of investments | RBI | |||
| submitted by all NBFC-NDSIs(Non Deposit taking NBFCs) | |||||
| NBS -7 | Quarterly Statement of Capital Funds, Risk Assets/Exposures and risk assets Ratio. | RBI | |||
| SA and CEO certificate for NBS-7 | Certifying NBS-7 | RBI | |||
| To be provided by NBFCs having asset size between 50-100 cr | |||||
| Quarterly Return | Quarterly Return by NBFC-ND with asset size of Rs.50 – 100 Cr. | RBI | |||
| submitted by all SCRCs(Securitisation and reconstruction company) | |||||
| SCRC | Quarterly statement of assets acquired, securitized& reconstructed | RBI | |||
| submitted by all NBFCs | |||||
| Branch Info | Branch Details | RBI | |||
| HALF YEARLY COMPLIANCES | |||||
| Form Name | Purpose of the Form | Department | |||
| To be provided by all NBFC accepting / holding public deposits having asset size above Rs. 100 crores or having public deposits of Rs. 20 crores and above | |||||
| NBS_ALM-2 | Asset liability mismatches and interest rate exposure(Within 20 days ofthe close of half year) | Regional office of the Department in whose jurisdiction NBFC is registered | |||
| provided by all NBFC-NDSIs (Non Deposit taking NBFCs) | |||||
| NBS_ALM-3 | Interest rate sensitivity | statement shall filed with the Bank | |||
| YEARLY COMPLIANCES | ||
| Form Name | Purpose of the Form | Department |
| submitted by all NBFC-NDSIs(Non Deposit taking NBFCs) | ||
| ALM_Return | Asset liability mismatches and interest rate exposure | RBI |
| submitted by all Residuary Non-Banking Companies: | ||
| Form – NBS 1A | Annual Return on Deposits(once in a year, after March 31 and latest by September 30) | Regional Office of Department of Non-Banking Supervision, RBI where registered office of the company is situated |
| submitted by NBFCs having asset size between Rs 100 to Rs 500cr | ||
| NBS-8 | Annual Return on NBFC-ND With Asset Size From Rs.100 Cr. To 500 Cr | RBI |
| submitted by NBFCs having asset size below Rs 100cr | ||
| NBS-9 | Annual Return on NBFC-ND-SI With Asset Size Below Rs.100 Cr | RBI |
| provided by all NBFC’s accepting / holding public deposits, and MNBCs – except Residuary Non-Banking Companies | ||
| NBS-4 | Repayment of Deposits only in respect of rejected/cancelled companies | Department of Non-Banking Supervision, RBI |
| CA certificate for NBS 4 | Certifying NBS-4 | RBI |
| EXTRA COMPLIANCES | |||
| Form Name | Purpose of the Form | Department | |
| filled in by all residuary non-banking financial companies | |||
| Form Schedule “A” | General Information of the Company(once a year as early as possible latest by the 30th September) | Regional Office of the Department of Supervision, Financial Companies Wing | |
| submitted by all NBFCs whether holding public deposits or not | |||
| Special Return | General information and Net Owned Funds | RBI | |
| UNDER COMPANIES ACT, 2013 | |||
| Form Name | Purpose of the Form | Department | |
| E-Form MGT-7 | Filing of Annual Return(Within 60 days of AGM) | ROC
| |
| E-Form AOC-4 | Filing of Balance Sheet & P & L A/c(Within 30days of AGM) | ROC
| |
| E-Form DIR-12 | If there is any change in Directors(Within 30days of that change) | ROC
| |
| NBFC-NDSIs(Non-Deposit taking NBFCs) | ||
| Form Name | Purpose of the Form | Department |
| Monthly Return | Monthly Return on NBFC-ND-SI with asset size of Rs.100 CR. & above | RBI |
| NBS_ALM-1 | Statement of Short term dynamic liquidity(Within 10 days of the close of the Month) | RBI |
| NBS -7 | Quarterly Statement of Capital Funds, Risk Assets/Exposures and risk assets Ratio. | RBI |
| SA & CEO certificate for NBS-7 | Certifying NBS-7 | RBI |
| NBS_ALM-3 | Interest rate sensitivity | statement shall filed with the Bank |
| ALM_Return | Asset liability mismatches and interest rate exposure | RBI |
| Non-Banking Financial Companies accepting / holding public deposits having asset size above Rs. 100 crores or having public deposits of Rs. 20 crores and above | ||
| Form Name | Purpose of the Form | Department |
| NBS-6 | Monthly Return On Exposure To Capital Market | RBI |
| NBS_ALM-2 | Asset liability mismatches and interest rate exposure(Within 20 days of the close of half year) | Regional office of the Department in whose jurisdiction NBFC is registered |
| provided by all NBFC’s accepting / holding public deposits, and MNBCs – except Residuary Non-Banking Companies: | ||
| Form Name | Purpose of the Form | Department |
| NBS 1 | Quarterly Return on Important Financial Parameters of Deposit Taking NBFCs | RBI |
| NBS -2 | Quarterly Statement of Capital Funds, Risk Assets/Exposures and risk assets Ratio. | RBI |
| CA & CEO certificate for NBS-2 | Certifying NBS-2 | RBI |
| NBS 3 | Submitting return on Quarterly basis for Statutory Liquid Asset | RBI |
| NBS-4 | Repayment of Deposits only in respect of rejected/cancelled companies | Department of Non-Banking Supervision, RBI |
| CA certificate for NBS 4 | Certifying NBS-4 | RBI |
| submitted by all Residuary Non-Banking Companies: | ||
| Form Name | Purpose of the Form | Department |
| NBS 3A | Quarterly Return on Statutory Liquid Assets | RBI |
| Quarterly Return I | Return of investments | RBI |
| Form – NBS 1A | Annual Return on Deposits(once in a year, after March 31 and latest by September 30) | Regional Office of Department of Non-Banking Supervision, RBI where registered office of the company is situated |
| Form Schedule “A” | General Information of the Company(once a year as early as possible latest by the 30th September) | Regional Office of the Department of Supervision, Financial Companies Wing |
| provided by NBFCs having asset size between 50-100 cr | ||
| Form Name | Purpose of the Form | Department |
| Quarterly Return | Quarterly Return by NBFC-ND with asset size of Rs.50 – 100 Cr. | RBI |
| provided by all SCRCs(Securitisation and reconstruction company) | ||
| Form Name | Purpose of the Form | Department |
| SCRC | Quarterly statement to be filed for asset acquired, reconstructed and securitized | RBI |
| submitted by NBFCs having asset size between Rs 100 to Rs 500cr | ||
| Form Name | Purpose of the Form | Department |
| NBS-8 | Annual Return on NBFC-ND With Asset Size From Rs.100 Cr. To 500 Cr | RBI |
| submitted by NBFCs having asset size below Rs 100cr | ||
| Form Name | Purpose of the Form | Department |
| NBS-9 | Annual Return on NBFC-ND-SI With Asset Size Below Rs.100 Cr | RBI |
| submitted by all NBFCs whether holding public deposits or not | ||
| Form Name | Purpose of the Form | Department |
| Special Return | General information and Net Owned Funds | RBI |
| Branch Info | Branch Details | RBI |
| Residuary Non-Banking Company | ||||||
| Ø Residuary Non-Banking Company is a class of NBFC which is a company and has its principal business the receiving of deposits, under any scheme or arrangement or in any other manner and not being investment, asset financing, Loan Company. | ||||||
| Ø These companies are required to maintain investments as per directions of RBI, in addition to liquid assets. The functions of these companies is different from those of NBFCs in terms of method of mobilization of deposits and requirement of deployment of depositors funds. However NBFC are also required to follow prudential norms also. | ||||||
