NBFC Registration with distinct entity
As per RBI Master Directions, Non-Banking Financial Companies (NBFCs) must register with various entities, including Credit Information Companies (CICs), to ensure transparency and efficient credit assessment.
Table of Contents:
(a) NBFC Registration with Credit Information Companies (CICs)
As per RBI Master Directions, Non-Banking Financial Companies (NBFCs) must register with various entities, including Credit Information Companies (CICs), to ensure transparency and efficient credit assessment.
What Are Credit Information Companies (CICs)?
- Also known as Credit Bureaus, CICs operate under the Credit Information Companies (Regulation) Act, 2005.
- They collect, analyze, and disseminate credit data from banks and financial institutions.
- They provide Credit Information Reports (CIRs) and Company Credit Reports (CCR) for businesses.
Why Must NBFCs Register with CICs?
- Credit Risk Assessment - Helps NBFCs evaluate borrower creditworthiness.
- Better Loan Decision-Making - Lenders assess the Company Credit Report (CCR) before approving loans.
- Regulatory Compliance - Required as per RBI's Master Directions & Notifications.
- Improved Credit Management - Enhances risk mitigation and credit portfolio quality.
Major Credit Information Companies in India | NBFCs must register with at least one of these RBI-approved CICs:
- TransUnion CIBIL - India's largest credit bureau, widely used by lenders.
- Experian - Global credit information provider with accurate risk assessment.
- Equifax - Offers risk and fraud prevention solutions.
- CRIF High Mark - Specializes in retail and MSME credit reporting.
Why Choose Panchal S K and Associates?
- Seamless CIC Registration for NBFCs
- Expert Advisory on Credit Risk Management
- Compliance with RBI Guidelines
- Customized Solutions for Credit Reporting & Evaluation
(b) CERSAI: Central Registry of Securitisation Asset Reconstruction and Security Interest of India
CERSAI is a Government of India company licensed under Section 8 of the Companies Act, 2013. It serves as a centralized online platform established by the Reserve Bank of India (RBI) to maintain records of security interests created over properties.
Key Functions of CERSAI:
- Records Security Interests - Maintains details of movable, immovable, and intangible properties pledged as collateral.
- Prevents Fraudulent Transactions - Helps financial institutions detect multiple loans on the same asset.
- Encumbrance Verification - Ensures clear ownership of properties before lending.
- Legal Compliance - Provides a registry for attachment orders and court orders, giving a complete financial picture of an encumbered asset.
- Supports Lenders & Creditors - Available to all financial institutions, including NBFCs, banks, and creditors, to secure lending decisions.
Why is CERSAI Registration Important for NBFCs?
- Ensures transparency in lending by verifying pledged assets.
- Reduces the risk of fraudulent claims and multiple lending.
- Strengthens due diligence for loan approvals.
- Enhances loan recovery mechanisms in case of default.
- Provides legal protection in asset-backed lending.
Why Choose Panchal S K and Associates?
- CERSAI Registration & Compliance Assistance
- Due Diligence & Security Interest Assessment
- Legal Advisory on Secured Lending
- Expert Support in Risk Mitigation & Asset Verification
(c) NBFC Registration with FIU-IND
Financial Intelligence Unit (FIU-IND) Registration for NBFCs
FIU-IND (Financial Intelligence Unit – India) registration is mandatory for all Non-Banking Financial Companies (NBFCs) post-incorporation.
This requirement falls under the Prevention of Money Laundering Act (PMLA), 2002, ensuring compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations.
Key Objectives of FIU-IND Registration:
- Monitor Financial Transactions - Tracks and reports suspicious transactions and cash transactions exceeding prescribed limits.
- Prevent Money Laundering & Terrorism Financing - Strengthens financial integrity by identifying illicit financial activities.
- Ensure Regulatory Compliance - Helps NBFCs comply with PMLA reporting obligations.
- Central Repository of Financial Data - Collects, analyzes, and disseminates valuable financial intelligence to regulatory bodies.
Reporting Requirements for NBFCs:
- Suspicious Transaction Reports (STRs) - Transactions that indicate potential money laundering or financial fraud.
- Cash Transaction Reports (CTRs) - Transactions above ₹10 lakhs in a single deal or a series of linked transactions.
- Counterfeit Currency Reports (CCRs) - Reports on instances of fake currency detection.
- Cross Border Wire Transfers (CBWTs) - Transactions above ₹5 lakhs involving foreign entities.
Why is FIU-IND Registration Important for NBFCs?
- Legal Obligation - Non-compliance may result in penalties and regulatory action.
- Strengthened Due Diligence - Helps NBFCs identify high-risk clients.
- Enhanced Transparency - Protects financial institutions from involvement in illicit transactions.
- Global Compliance Alignment - Supports India’s commitment to FATF (Financial Action Task Force) guidelines.
Why Choose Panchal S K and Associates?
- Expert Guidance - Step-by-step support from incorporation to RBI registration.
- Comprehensive Documentation - Assistance with business plans, financial structuring, and compliance filings.
- Regulatory Compliance - Ensuring adherence to RBI norms, corporate governance, and financial reporting.
- Ongoing Support - Post-registration compliance, auditing, and advisory services.
(d) Central KYC (CKYC) Registration for NBFCs
Central KYC (CKYC) is a mandatory compliance for Non-Banking Financial Companies (NBFCs) regulated by the Reserve Bank of India (RBI). CKYC is a centralized customer verification system managed by CERSAI (Central Registry of Securitization and Asset Reconstruction and Security Interest in India).
This system eliminates repetitive KYC processes for financial institutions, streamlining customer onboarding and reducing documentation burdens.
Key Features of CKYC for NBFCs:
- Centralized Customer Database - Stores customer KYC records in a secure and standardized format.
- Simplified KYC Process - Customers don’t need to re-submit documents while dealing with multiple financial institutions.
- RBI Compliance Requirement - All NBFCs must register and report customer KYC details under CKYC.
- Reduces Fraud Risks - Prevents identity duplication and enhances transparency in financial transactions.
Benefits of CKYC for NBFCs:
- Improves Operational Efficiency - Saves time and effort in customer verification.
- Reduces Paperwork & Documentation Costs - Single KYC record for multiple financial transactions.
- Strengthens Customer Due Diligence (CDD) - Ensures accurate verification and regulatory compliance.
- Enhances Data Security & Accessibility - Protects customer information while making it easily retrievable.
Process of CKYC Registration for NBFCs:
- Step 1: Register the NBFC with CERSAI for CKYC compliance.
- Step 2: Submit customer KYC documents (ID proof, address proof, PAN, etc.) to CKYC Registry.
- Step 3: A 14-digit KYC Identifier Number (KIN) is assigned to each customer.
- Step 4: Use KIN for future transactions without requiring re-KYC.
Why Choose Panchal S K and Associates?
- Complete CKYC Registration Assistance
- RBI Compliance & Regulatory Guidance
- Seamless Customer Onboarding Solutions
- Fraud Prevention & Due Diligence Support
(e) Registration with NeSL
National E-Governance Securities Limited (NeSL) – India's First Information Utility (IU)
National E-Governance Securities Limited (NeSL) is India’s first and only Information Utility (IU), registered with the Insolvency and Bankruptcy Board of India (IBBI) under the Insolvency and Bankruptcy Code, 2016 (IBC, 2016).
NeSL was established by leading banks and public institutions and is incorporated as a Union Government Company to enhance transparency and efficiency in financial transactions.
Key Functions of NeSL:
- Acts as a Repository of Legal Evidence - Stores debt and claim information submitted by financial and operational creditors.
- Ensures Data Authentication - All debt records are verified and authenticated by the parties involved.
- Facilitates Insolvency Resolution - Helps insolvency professionals, creditors, and the NCLT in faster dispute resolution.
- Supports Digital Infrastructure - Uses electronic submission and verification to create a transparent financial ecosystem.
Benefits of NeSL for Businesses & Financial Institutions:
- Secure Debt Record-Keeping - Prevents disputes by maintaining accurate and legally recognized records.
- Faster Debt Resolution Under IBC - Reduces time for insolvency proceedings and claim settlements.
- Ensures Regulatory Compliance - Helps businesses meet RBI and IBBI regulations efficiently.
- Promotes Financial Stability - Strengthens the trust and credibility of financial transactions.
Process of NeSL Registration & Compliance:
- Step 1: Financial or operational creditors submit debt-related information to NeSL.
- Step 2: The debtor is notified for authentication and must verify the debt details.
- Step 3: Verified information is stored securely in NeSL’s database.
- Step 4: In case of default, NeSL records serve as valid evidence in insolvency proceedings.
Why Choose Panchal S K and Associates?
- Expert Assistance in NeSL Registration & Compliance
- Debt Verification & Legal Documentation Support
- End-to-End Guidance on IBC Regulations
- Streamlined Process for Quick & Accurate Filing
(f) Registration with CRILC
Central Repository of Information on Large Credits (CRILC)
The Reserve Bank of India (RBI) has established the Central Repository of Information on Large Credits (CRILC) to collect, store, and disseminate credit data to lenders. This initiative aims to enhance transparency, credit risk management, and early detection of financial stress in the banking and NBFC sector.
Key Features of CRILC:
- Centralized Credit Database - Maintains records of large borrowers' credit exposures.
- Quarterly Reporting Requirement - NBFCs (as notified by RBI) must submit credit data every quarter.
- Early Warning System - Helps financial institutions identify non-performing assets (NPAs) and potential defaults.
- XBRL-Based Submission - Once the XBRL reporting system is in place, reporting will be streamlined.
NBFC Compliance with CRILC:
Who Must Report?
- All Notified NBFCs as per RBI guidelines.
- Any NBFC with significant credit exposures.
What Must Be Reported?
- Credit information on large borrowers.
- Potential defaults and stressed assets.
How to Report?
- Submissions are quarterly in the prescribed format (Annex I).
- XBRL reporting mechanism will soon be mandatory.
Benefits of CRILC for NBFCs & Financial Institutions:
- Improved Risk Assessment - Helps NBFCs and banks assess borrowers' creditworthiness.
- Early Identification of NPAs - Enables proactive measures for debt recovery and restructuring.
- Enhanced Credit Monitoring - Strengthens the overall financial ecosystem by reducing bad debts.
- Regulatory Compliance - Ensures NBFCs follow RBI guidelines to avoid penalties.
Why Choose Panchal S K and Associates?
- CRILC Registration & Reporting Assistance
- Quarterly Data Submission & Compliance Management
- XBRL Implementation Support
- Risk Assessment & Credit Monitoring Strategies