Checklist for NBFC Compliances 2021

Checklist for NBFC Compliances 2021

What is NBFC?

According to the Companies Act, 2013 of India, Non-Banking Financial Companies are the companies which provide financial services like banks as a primary business, but do not hold a banking licence. The only thing which differentiates NBFC from Banks is that most of the NBFC do not accept Demand deposits. A Demand deposit is the money deposited in the bank by the account-holder to withdraw it at any moment he wants to, to meet his daily expenses. The services of NBFC includes issuing of loan and advances, shares, bonds, stock, insurance, or chit funds. It does not include businesses which are primarily involved in agriculture activity, industrial activity, trade of goods and services except securities, and real estate.

­­­Who regulates NBFC?

NBFC in India are regulated by the Reserve Bank of India. The company which has to be registered with RBI under the Companies Act, 2013 and have a net owned fund of Rs. 2 Cr*. The CIBIL record of the company should be clear. One out of three directors should have prior financial experience. The deposits collected by NBFC should be taken for a minimum period of 12 months and maximum period of 60 months. The interest charged by the company cannot be more than the limit prescribed by RBI.

NBFCs have to submit various returns to the RBI with respect to their deposit acceptance, prudential norms compliance, ALM etc. mentioned in the Master Direction for NBFC Return, 2016. The master direction was introduced by the RBI for secure operational activity of NBFCs. To avoid a penalty all NBFCs have to comply with it.

What are the compliances of NBFC?

Non-Deposit taking NBFC having asset size below Rs.100 Cr* have to submit- Branch Info Return (Asset size 50 Cr* or above) & Overseas Investment Return (If having Overseas Investment) quarterly; Return on FDI half-yearly; NBS-9 and SAC annually.

Non-Deposit taking NBFC having asset size between Rs.100 to 500 Cr* have to submit- Return on Important Financial Parameters monthly; ALM-1, Branch Info Return, Overseas Investment Return quarterly;  Return on FDI, ALM-2, ALM-3 half yearly; NBS-8 annually; SAC annually.

Non-Deposit taking NBFC having asset size Rs.500 Cr* have to submit- Return on Important Financial Parameters monthly; ALM-1, Branch Info Return, NBS-7, Overseas Investment Return, CRILC quarterly; Return on FDI, ALM-2, ALM-3 half yearly; ALM Yearly, NBS-8, SAC annually; SMA-2 Return weekly.

Deposit taking NBFC have to submit NBS-1, NBS-2, NBS-3, Overseas Investment Return, Branch info return, CRILC quarterly; NBS-6 monthly; ALM (NBFC-D), Return on FDI half-yearly; NBS-8, SAC annually; SMA-2 Return weekly.

What are the due dates for filing NBFC Compliances?

Sr No.

NBFC Compliances

Due Date

1

Unaudited March return/ NBS-7 Return

On or before 30th June

2

Statutory Auditors certificate of Assets & Income

On or before 30th June

3

Company details having FDI/Foreign Funds

On or before 30th June

4

Audited March return / NBS-7 Return

Upon completion

5

Audited Annual balance file and P&L Account

One month from the signoff date

6

Non-Acceptance of Public Deposit Resolution

Before the commencement of the new financial year

7

Declaration of Auditors

Annually

8

Monthly return

By the 7th of every month

9

Appointment of Director – Appendix-III

Within 30 days of appointment

10

Resignation of Director – DIR-12 + Challan report

Within 30 days of appointment

11

Any notification adopted in the ensuing Board meeting and filing the certified copy with RBI

 

 

Fine and penalties for non-compliance:

RBI can also impose heavy fines and penalties on NBFCs who do not comply with the mandatory compliances. The penalty depends upon the category of NBFC and it could also lead to revocation of its license or wind up of the NBFC.