NBFC Compliances under FEMA and RBI

NBFC or Non-Banking Financial Company is a type of banking company that does not have a full banking license yet and is not regulated and supervised by a national or international banking regulatory authority. RBI compliance for banks is necessary and is essential to ensure proper assistance to the banks and to manage the compliance risks which can be in the form of financial losses or loss of reputation of the banks.

NBFCs have to comply with the rules given under FEMA to carry out their activities effectively under the financial sector. RBI compliance for NBFC is necessary and is mandatory in nature. However for NBFC compliance with RBI is managed by the automatic route under FEMA, hence no permission of RBI is required. But the permission of RBI is required to carry out the business activities by the NBFCs.

NBFC RBI compliance is usually regulated and managed by the RBI.

Eligibility Criteria for NBFC Compliance

The following criteria are required for the NBFC Compliance:-

  • Registration of NBFC compliance on FEMA is highly essential.
  • NBFC should have permission for securing foreign investment from foreign companies.

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