Common Mistakes to Avoid During NBFC Registration



Starting a Non-Banking Financial Company (NBFC) in India is an exciting opportunity, especially in a market where alternative lending, digital finance, and micro-credit services are booming. However, the process of NBFC Registration in India can be complex and requires careful planning, legal accuracy, and regulatory compliance.

Many first-time applicants make critical errors during the NBFC registration online in India process that lead to delays, rejections, or unnecessary costs. In this blog, we highlight the most common mistakes to avoid during NBFC registration, along with practical tips to ensure a smooth application process.

1. Insufficient Capital and Net Owned Funds (NOF)

One of the most common mistakes during NBFC Registration in India is not meeting the RBI’s minimum capital requirement. As per the latest norms, an NBFC must have a Net Owned Fund (NOF) of at least ₹2 crores.

Avoid This By:

  • Ensuring your company maintains the required capital.

  • Getting a certificate from a Chartered Accountant confirming the NOF before applying for the NBFC license from RBI in India.

2. Incomplete Documentation

Many applications for NBFC license online are rejected due to missing or inaccurate documents. These may include KYC documents, board resolutions, incorporation certificates, audited financials, and business plans.

Avoid This By:

  • Preparing a checklist of all documents needed.

  • Working with an NBFC registration consultant who can guide you through proper documentation.

3. Not Choosing the Right Business Structure

To apply for an NBFC license, your company must be registered under the Companies Act, 2013 as a private or public limited company. Sole proprietorships, LLPs, and partnerships are not eligible.

Avoid This By:

4. Lack of a Detailed Business Plan

RBI places great importance on your company’s financial projections, lending models, compliance framework, and risk management policies. A vague or generic business plan can reduce your chances of approval.

Avoid This By:

  • Preparing a well-researched and customized business plan.

  • Taking assistance from an experienced NBFC registration consultant in India.

5. Ignoring Compliance Requirements

NBFCs are subject to several post-registration compliance requirements such as regular audits, regulatory filings, KYC norms, and adherence to the Fair Practices Code. Ignoring these can lead to license suspension or penalties.

Avoid This By:

  • Building an in-house compliance team or outsourcing to experts.

  • Staying updated with RBI notifications even after acquiring the NBFC license in India.

6. Delays in Online Filing or Submissions

Some applicants delay uploading documents or responding to RBI queries, which slows down the approval process for the NBFC license online.

Avoid This By:

  • Keeping all documents ready in digital format.

  • Regularly tracking the status of your application on the RBI portal.

7. Choosing the Wrong Consultant

Hiring an inexperienced or non-compliant advisor can do more harm than good. Poor guidance often leads to submission errors, regulatory violations, or rejections.

Avoid This By:

Final Thoughts

Registering an NBFC is a rewarding but regulation-heavy process. To increase your chances of success, avoid the mistakes listed above and always follow RBI's latest guidelines. Whether you're a fintech startup or an established entrepreneur, securing your NBFC license from RBI in India is a strategic move—just make sure it’s done right the first time.

By ensuring accurate documentation, capital compliance, and professional guidance, your NBFC registration online journey can be smooth, fast, and stress-free.

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