A Non-Banking Financial Company (NBFC) can help individuals and businesses access credit, but setting one up requires more than incorporating a company and arranging capital. If a company intends to carry on lending or investment as its principal business, it generally needs a Certificate of Registration from the Reserve Bank of India (RBI) before commencing that activity. Section 45-IA of the RBI Act, 1934 sets out this requirement. For a new applicant seeking registration as a general NBFC, the minimum Net Owned Fund (NOF) is ₹10 crore; specialised categories may have different requirements. The first step is to define the proposed business clearly. A company planning ordinary lending, peer-to-peer intermediation or account aggregation cannot assume that identical eligibility conditions apply to each model. Its promoters should determine the appropriate NBFC Registration category, calculate the required NOF and ensure that the company’s constitutional documents permit the proposed activity. They should also prepare a practical business plan covering customers, products, funding, operations, staffing and risk controls. RBI examines the applicant’s ownership, directors, financial position and ability to operate responsibly. Meeting the capital requirement alone does not guarantee registration. Similarly, a certificate for non-deposit-taking activity does not automatically permit an NBFC to accept public deposits. The company must understand the precise scope and conditions of its approval before starting operations.

The registration file should contain the company’s incorporation documents, memorandum and articles of association, ownership and director details, financial statements, evidence of NOF and a detailed business plan. Applicants should also be ready to explain the promoters’ background, the source of their funds, the proposed governance structure and the systems for managing credit and operational risks. Information must remain consistent throughout the application. For example, the products described in the business plan should match the company’s objects, financial projections and proposed policies. RBI may request clarifications or further records during its review, making careful preparation essential. Registration is also the beginning of ongoing compliance. Once approved, an NBFC must follow the RBI directions applicable to its category and regulatory layer, including requirements concerning governance, customer protection, know-your-customer checks, recordkeeping, risk management and reporting. Founders should develop these processes while preparing the application so the company is ready to operate responsibly when registration is granted. They should also confirm whether their proposed activity requires RBI registration, falls under another regulator or qualifies for an applicable exemption. Where registration is required, carrying on NBFC business without a certificate may invite regulatory action. Careful category selection, adequate capital, a workable business plan and accurate documentation provide a strong foundation for the application and the business that follows.