Non-Banking Financial Companies (NBFCs) play a vital role in India’s financial sector by providing credit and financial services. To ensure their smooth functioning and protect stakeholders, NBFCs are required to follow strict compliance norms as prescribed by the Reserve Bank of India (RBI).

NBFC compliance includes regular filing of returns, maintenance of statutory records, adherence to prudential norms, and compliance with fair practices. Some key returns are NBS-1, NBS-2, NBS-3, NBS-4, and NBS-7, depending on the type of NBFC. Additionally, all NBFCs must comply with Know Your Customer (KYC) guidelines, Anti-Money Laundering (AML) norms, and statutory audit requirements.

Annual compliance includes filing audited financial statements, board resolutions on liquidity and capital adequacy, and disclosure of prudential ratios. RBI also mandates the appointment of a statutory auditor and auditor’s certificate confirming adherence to prescribed norms.

Failure to comply with NBFC regulations can lead to monetary penalties, restrictions on operations, or cancellation of RBI registration. Timely compliance ensures smooth operations, investor confidence, and long-term sustainability.