Key complying Requirements with NBFC Compliances

Essential NBFC Compliance Checklist 

• NBFCs are the most popular kind of financial institutions in India, and they provide a substantial portion of the country’s GDP growth. It is just as necessary to secure an NBFC licence before starting an NBFC as it is to follow up with the NBFC annual compliance checklist.
• In case Company fail to follow with NBFC regulations, you will face serious fines. It may also result in the company’s closure or the suspension of its NBFC licence.
• If you run a non-bank financial institution, make sure you have a current NBFC yearly compliance checklist.
• A checklist can assist you in filing your returns on time. We’ve compiled a comprehensive list of NBFC annual compliance requirements so you may avoid penalties and file returns on time.

Key complying Requirements with NBFC Compliances

The RBI has sifted current supervisory filling return online submitting process from COSMOS platform to the New XBRL filling system with the RBI portal. Therefore, Non-Banking Financial Companies are needed to have the below in order to submit NBFC Returns on all latest XBRL portal:

 

• Get NBFC User ID & Password from RBI;
• Installation of XBRL RBI file need
• Update profile on the XBRL portal on time to time basis.

Kind of Non-Banking Financial Companies (NBFC) based on liabilities & Activities

Based on Activities

• Systemically Important Core Investment Company (CIC)
• Investment and Credit Company (ICC)
• Infrastructure Finance Company (IFC)
• Infrastructure Debt Fund Non-Banking Financial Company (IDF-NBFC)
• NBFC- Non-Operative Financial Holding Company (NOFHC)
• Non-Banking Financial Company-Factors
• Mortgage Guarantee Companies
• Non-Banking Financial Company – Microfinance Companies (MFIs)

Based on Liabilities

• Non-Deposit Accepting Non-Banking Financial Companies;
• Deposit Accepting Non-Banking Financial Companies;
• Systematically Important Non-Banking Financial Companies (NBFC-ND-SI);
• Other Non-Deposit Holding Non-Banking Financial Companies;

NBFC Annual compliance checklist

• The annual compliance checklist for NBFCs establishes the timeframes for filing NBFC compliances and returns. The list is compiled in accordance with RBI standards and master directives.
• According to the Reserve Bank’s Non-Banking Financial Company Returns (Reserve Bank) Directions, 2016, every Non-Banking Financial Company must follow the compliances outlined later in this blog.

Essential Non-Banking Financial Company Compliance Checklist for Non-Deposit & Deposit Company.

We have compiled an annual Non-Banking Financial Company compliance checklist for every Non-Deposit & Deposit Company. Have a look below:

S. No	Particulars	Time Limit
Monthly Non-Banking Financial Company Compliance
1	Upload Monthly Return	Filling By the 7th of each month
2	Monthly Return	Filling By the 7th of each month
Periodical Non-Banking Financial Company Compliances
1.	Director Appointment	Filling Within 30 days of appointment
2.	Any notice Receipt then at the next Board of director meeting & filing a certified copy to Reserve Bank of India
3.	Director Resignation i.e. DIR-12 + Challan report	Filling needed too be made  in 30 days of appointment
	Annual Non-Banking Financial Company Compliances
1.	Audited file of Annual P&L A/c & balance sheet	One month from the date of signoff
2.	Income & Assets certificate from Statutory Auditors	Filling needed to be done on or before 30th June
3.	Announcement of Auditors to Annual Audit Company	Yearly Basis
4.	NBS-7/ Inspected return for March	After the completion Inspected
5.	Information & details of companies with Foreign Funds or Foreign Direct Investment	Filling needed to be done on or before 30th June
6.	Public Deposit Rejection Reconciliation	Before the start of the new FY.
7.	NBS-7 Return/ Undiscovered March Return	Filling needed to be done On or before 30th June

 

Compliance & Return of Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India

As per the RBI Master Direction – NBFC-SI & NBFC-NDs-SI deposit company is required to submitted below refunds as set out as below:

Deposit taking Non-Banking Financial Companies are needed to file the below refunds:

• Audit Report & Audited Balance Sheet P&L A/c of Non-Bank Financial Companies receive public funds. Branch Data Recovery: It is a quarterly refund in which all the Non-Banking Financial Companies that receives or manages public funds required to deposit it.
• NBS-1 Refunds: All Non-Banking Financial Companies that receives or manages public funds must file an NBS-1 return quarterly. The objective of submitted this return is to take financial information such as Assets and Liabilities, Profit & Loss Account, Disclosures in sensitive areas, etc.
• NBS-2 Refunds: Non-Banking Financial Companies Receiving Public Funds is required to file a quarterly refund to Prudential Norms. The Objective after submitting this refund is to take into account compliance with a No of strategic principles such as the Financial Sufficiency, NOF, division of assets, Provision, etc.
• NBS-3 refunds: Also, it is a 3^rd – Quarter refund where all Non-Banking Financial Companies who takes a deposit needs to apply all Quarter. Moreover, the Objective of introducing this return is to capture information regarding official investments in Liquid nations. Moreover, statutory investments include State & Central Govt Securities Schedules, or Commercial Bank Fixed Deposits etc.
• NBS-4 Recovery: kind of Yearly return of essential parameters. Reimbursement must be lodged by rejected company holding public funds. Earlier it was installed on NBS-5. But now NBS-5 is suspended as
• NBS-1 is introduced quarterly. The purpose of the NBS-4 application is to obtain the payment status of the rejected Non-Banking Financial Companies that receive public funds.
• NBS-6 refunds: It is a monthly refund in case the financial market is found by Non-Banking Financial Companies taking deposits with total assets equal to or in more INR. 100 Cr.
• Half -Yearly ALM Returns by the Non-Banking Financial Companies receives a public grant of excess than INR 20 kg or bag size in More than INR 100 Cr.

Filling of Annual Statements & Returns

Non-Banking Financial Companies -Non-deposit type is required to submit or share risk assets, ratio, annual statement of capital funds etc. it can be submitted either physically or online. Moreover, as per the in Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) directions, 2007 it is required to complied & consolidated needed  Liquidity, capital adequacy, & other disclosure norms.

Returns by NBFC with RBI- A. Returns by NBFCs-D (Deposit Taking):-

Sr. No.	Name of the Return	Periodicity	Due on	Remarks
1	NBS1	Quarterly	15 days from the end of Quarter	Financial Indicators by deposit taking NBFCs
2	NBS2	Quarterly	15 days from the end of Quarter	Prudential Norms by deposit taking NBFCs
3	CEO and CA certificate for NBS 2	Quarterly	Along with NBS 2	Certifying NBS­2
4	NBS3	Quarterly	15 days from the end of Quarter	Liquid Assets by deposit taking NBFCs
5	NBS4	Yearly	30 days from the end of year	Return on status of public deposits by NBFCs who’s CoR is rejected by the Bank to know the repayment status of public deposits of rejected NBFCs- D this return is being called for.
6	CA certificate form NBS – 4	Yearly	Along with NBS 4	Certifying NBS­4
7	ALM (NBFC-D)	Half yearly	30th April and 30th Oct.	NBFCs-D having public deposit of > Rs 20 crore Or asset size of Rs 100 crore or more.
8	Branch Information return	Quarterly	15 days from the end of Quarter	Branch Information return
9	SAC	Annual	One month from the date of finalization of Balance Sheet, up to 31st December	Statutory Auditor Certificate
10	CRILC	Quarterly	21 days from the end of Quarter	Reporting to Central Repository of Information on Large Credits

B. Returns by NBFC-ND-SI (Non-Deposit Taking, Systematically Important):-

Sr. No.	Name of the Return	Periodicity	Due on	Remarks
1	NBS7	Quarterly	15 days from the end of Quarter	Quarterly Statement of Capital Funds, Risk-Weighted Assets and risk assets Ratio etc.
2	CEO and SA certificate for NBS 7	Quarterly	Along with NBS7	Certifying NBS­7
3	NBFCs-ND-SI 500cr	Quarterly	15 days from the end of Quarter	Return on Important Financial Parameters
4	ALM-1	Quarterly	15 days from the end of Quarter	Statement of short term dynamic liquidity
5	ALM-2 & 3	Half yearly	30th April and 30th Oct.	Statement of structural liquidity and Interest Rate Sensitivity
6	ALM-(NBFC-ND-SI)	Annual	15th April
7	Branch Info return	Quarterly	15 days from the end of Quarter	Branch Information return
8	CRILC	Quarterly	21 days from the end of Quarter	Reporting to Central Repository of Information on Large Credits
9	SAC	Annual	One month from the date of finalization of Balance Sheet. Not later than 31st December	Statutory Auditor Certificate

C. Returns by NBFC-ARC:-

Sr. No.	Name of the Return	Periodicity	Due on	Remarks
1	ARC	Quarterly	15 days from the end of Quarter	Financial parameters and various operational details
2	SAC	Annual	One month from the date of finalization of Balance Sheet, up to 31st December	Statutory Auditor Certificate

D. Returns by NBFC-ND-having asset size of Rs 100 crore – Rs 500 crore:-

Sr. No.	Name of the Return	Periodicity	Due on	Remarks
1	NBS-9	Annual	60 days from the end of year, up to 30th May	Return on Financial Indicators
2	SAC	Annual	One month from the date of finalization of Balance Sheet, up to 31st December	Statutory Auditor Certificate

E. Returns by NBFC-ND-having asset size less than Rs 100 crore:-

Sr. No.	Name of the Return	Periodicity	Due on	Remarks
1	NBS-8	Annual	60 days from the end of year, up to 30th May	Return on Financial Indicators
2	SAC	Annual	One month from the date of finalization of Balance Sheet, up to 31st December	Statutory Auditor Certificate

F. Returns by NBFC-ND-having asset size Rs. 50 crores to Rs 100 crore:-

Sr. No.	Name of the Return	Periodicity	Due on	Remarks
1	SCRC	Quarterly	15 days from the end of Quarter	Quarterly statement of assets acquired/ securitized/ reconstructed
2	ND 50CR	Quarterly	15 days from the end of Quarter	Quarterly Return by Non-Deposit taking NBFC’s with asset size of Rs.50 ­- 100 Cr.

G. Returns by RNBCs:-

Sr. No.	Name of the Return	Periodicity	Due on	Remarks
1	NBS1A	Annual	6 months from the end of year, up to 30th September.	Return on Financial Indicators
2	NBS3A	Quarterly	15 days from the end of Quarter	Profit and Loss account, Exposure to sensitive sectors, Statutory Investments in Liquid Assets
3	SAC	Annual	One month from the date of finalization of Balance Sheet, up to 31st December	Statutory Auditor Certificate

H. Other Returns:-

Sr. No.	Name of the Return	Periodicity	Due on	Remarks
1	Overseas Investments	Quarterly	15 days from the end of Quarter	Details on overseas investment by NBFCs.
2	Return on FDI	Half yearly	30th April/ 30th Oct.	Details on Foreign Direct investment by NBFCs.

Asset-Liability Management Returns are allowed by NBFC Non-Deposit-SII to be Submitted

• ALM-1- Monthly Dynamic Liquidity Statement- Short Term Dynamic Liquidity Statement.
• Next is ALM-2- Half Annual Statement- Short Term Statement, Systemic Liquidity.
• ALM-3- Half a year- Declaration of vulnerability to interest rates-

CAPITAL-TO-RISK WEIGHTED ASSETS RATIO (CRAR)

• Exposure to Reality sector both direct & indirect.
• Maturity Patterns for liabilities & Assets.

Furthermore, if we have already obtained an NBFC license as stated above, we must comply with NBFC enforcement. Noncompliance can also result in severe fines and even the closure of a business.

If you are having trouble keeping track of NBFC compliance, you can contact a Rajput Jain & Associates specialist. Your Non-Banking Financial Company’s compliance will be handled entirely by us.

NBFCs-ND-SI is needed to file the below Returns:

• A monthly return on the needed financial parameters of NBFCs-ND-SI shall be file on a monthly basis.
• NBS-7: It is a quarterly estimated statement of capital expenditure, asset risk, risk assets etc, for NBFC-ND-SI. So we required to install it quarterly basis.

Asset-Liability Management (ALM) Returns: ALM Returns refers to the No of returns that which required to be file by NBFCs-ND-SI from time to time as stated as follows:

• Annually- Assets Liability Mismatch Statement [ALM-YRLY].
• Half Annual- Property structure ALM Statement [NBS-ALM2].
• The Half Annual – Interest Rate Sensitivity in ALM format – [Statement [NBS-ALM3].
• Quarterly – Branch Data Recovery: All NBFCs-ND-SI must file branch details on a quarterly.
• Monthly-ALM Statement [NBS-ALM1] Changing Temporary.

• Quarterly return on substantial non-deposit financial parameters taken by NBFCs holding assets above INR 50 Cr & higher but below INR 100 Cr.
• Non-deposit taking NBFCs with an asset size around INR 50 Cr & INR 100 Cr
• The basic information shall be filed on time to time basis over last 3 years, such as NOF, and profit/loss, company name, address.

NBFC – Additional Requirements of Compliances

In addition to the obvious compliances, all NBFCs in India must conform to the following provisions of Registrar of Companies under the Companies Act, 2013:

• Holding the Regulatory ROC Registers
• Book & Account Maintenance as per requirement
• Statutory Meetings Convene
• Drawing up the financial statements
• Auditor’s Appointment under ADT-1,
• Financial Statements Filing under AOC-4.
• Income Tax Returns Filings under income tax provision.
• Filing Annual Reports under MGT-7

Key Take away:

Any company that wishes to function as a non-banking financial institution in India must first register with the Reserve Bank of India. Moreover, the applicant must have a net owned fund of Rs. 2 crores and receive a certificate of registration from the bank, according to Section 45-IA of the RBI Act, 1934.

If you have been granted a license, you must strictly follow the NBFC Post Registration Compliances as outlined above. Non-compliance will also result in a severe penalty and, in extreme cases, the company’s closure.

The complex and expensive licensing requirements can make starting an NBFC appear difficult. RJA’s professionals will give complete NBFC Registration services. NBFC Registration and Advisory Services are areas where we specialize.

Non-Banking Financial Companies (NBFC) are registered under the Companies Act 2013 & are involved in business of loans and advances, collecting deposits, Govt-issued debentures, buying shares/stocks/bonds and securities.

Our Package inclusions:

• • Annual Balance Sheet Analysis
  • Annual Filing for Return
  • Annual tracker on compliance
  • Report of annual conformity to the Board of Directors
  • Creation of the practice of Equal Code in business
  • Reserve Bank of India liaising

Write to RAJPUT JAIN & ASSOCIATES  or call us on 9555555480

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