NBFC Compliances

Compliance Checklist for NBFCs in India: A Comprehensive Overview

Non-Banking Financial Companies (NBFCs) in India are regulated by the Reserve Bank of India (RBI), which mandates a number of compliance requirements to ensure the stability and sound operation of these entities. This article outlines the key regulatory compliances applicable to NBFCs, along with best practices for managing these requirements effectively.

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1. Audit

NBFCs are required to have their financial statements audited annually by a qualified auditor. The audit report must be submitted to the RBI and made available for public scrutiny

2. Regulatory Reporting

NBFCs must submit a variety of reports to the RBI and other regulatory bodies on a regular basis. Key returns include:

Filing via RBI's XBRL Portal:

DNBS 02: Quarterly filings.
DNBS 10: Annual filings (due by December 31st).
DNBS 13: Quarterly filings.

Filing via RBI's CIMS Portal:

DNBS 02: Quarterly filings.
DNBS 10: Annual filings (due by December 31st).
DNBS 13: Quarterly filings.

Other filings include:

Board Resolutions: Filed annually and on an event-based basis.
Returns to Financial Intelligence Unit (FIU): Monthly filings.
Returns to Central Know Your Customer Registry (CKYC): Monthly filings.
CERSAI Filings: Monthly filings.

Penalties for Non-Compliance

Failure to comply with the RBI regulations may lead to penalties, including fines, suspension of operations, or even cancellation of the NBFC’s license. Therefore, it is crucial for NBFCs to implement a strong compliance framework.