Non-Banking Financial Companies (NBFCs) are an important part of India’s financial system. They offer many financial services like loans, asset financing, peer-to-peer lending, and money transfer services. But since they are not banks, they follow different rules. The Reserve Bank of India (RBI) has made special norms for different types of NBFCs to make sure they work properly and protect public interest.

In this blog, we will explain the RBI norms for different categories of NBFCs in simple words. We will also discuss how you can apply for licenses like Online NBFC Registration in India, NBFC Account Aggregator License Online, PPI License Apply Online, and P2P Lending License Online.

What is an NBFC?

An NBFC is a financial company that provides services similar to a bank but does not have a banking license. NBFCs cannot accept demand deposits like savings accounts or current accounts. However, they play a key role in lending, investing, and helping people access credit.

Categories of NBFCs and Applicable RBI Norms

The RBI divides NBFCs into different categories based on their functions. Let’s understand them one by one:

1. NBFC-Investment and Credit Company (NBFC-ICC)

This is a broad category that includes companies that give loans, make investments, or do both.

RBI Norms for NBFC-ICC:

• Must maintain a minimum Net Owned Fund (NOF) of ₹10 crore.
  
  

• Must follow Fair Practices Code in lending and recovery.
  
  

• Need to report to RBI regularly through returns and filings.
  
  

• Must have a proper risk management system in place.
  
  

• Must ensure KYC compliance (Know Your Customer).
  
  

2. NBFC-Account Aggregator (NBFC-AA)

These NBFCs collect and share financial data between banks, insurance companies, mutual funds, etc., with the customer’s permission. They help create a 360-degree financial profile of a person or company.

RBI Norms for NBFC-AA:

• Only allowed to collect and share data; cannot store or use it.
  
  

• Must obtain an NBFC Account Aggregator License Online from the RBI.
  
  

• Must ensure strong data security and privacy measures.
  
  

• Must follow the Information Technology Act and RBI cybersecurity guidelines.
  
  

• Cannot perform any lending or financial transactions.
  
  

3. NBFC-P2P (Peer-to-Peer Lending Platforms)

These platforms connect borrowers and lenders directly through an online system.

RBI Norms for NBFC-P2P:

• Must apply for a P2P Lending License online from the RBI.
  
  

• Can only act as a marketplace; cannot lend from their own funds.
  
  

• Must have a minimum NOF of ₹2 crore.
  
  

• Must disclose all details to borrowers and lenders clearly.
  
  

• Must have an escrow account for fund transfers.
  
  

• Must ensure proper grievance redressal and customer service.
  
  

4. NBFC-Infrastructure Finance Company (NBFC-IFC)

These NBFCs lend money mainly to infrastructure projects like roads, bridges, airports, etc.

RBI Norms for NBFC-IFC:

• Must have NOF of ₹300 crore.
  
  

• 75% of assets must be invested in infrastructure loans.
  
  

• Required to maintain higher capital adequacy.
  
  

• Must follow norms for asset classification, provisioning, and reporting.
  
  

5. NBFC-Microfinance Institution (NBFC-MFI)

These NBFCs provide small loans (microloans) to low-income individuals or groups.

RBI Norms for NBFC-MFI:

• At least 85% of assets should be in microloans.
  
  

• Must follow limits on interest rates and charges.
  
  

• Must follow RBI’s Code of Conduct for microfinance.
  
  

• Must ensure financial literacy and transparency for borrowers.
  
  

6. NBFC-Factor

NBFC-Factors help businesses by purchasing their invoices and improving cash flow.

RBI Norms for NBFC-Factor:

• At least 50% of total assets should be in factoring business.
  
  

• Should register under Factoring Regulation Act.
  
  

• Must maintain proper capital adequacy.
  
  

• Need to follow KYC and AML (Anti-Money Laundering) norms.
  
  

7. NBFC-Core Investment Company (NBFC-CIC)

These companies mainly hold shares or securities of other companies.

RBI Norms for NBFC-CIC:

• Must have at least 90% of assets as investments in group companies.
  
  

• At least 60% of investments must be in equity instruments.
  
  

• Not allowed to trade in securities.
  
  

• CICs with assets over ₹100 crore must register with RBI.
  
  

Prepaid Payment Instruments (PPI) and NBFCs

PPIs are tools like wallets or cards that store money for future use. Companies wanting to offer PPI services need a PPI license from the RBI.

How to Apply for a PPI License Online:

• Must have net worth of ₹15 crore at the time of application.
  
  

• Must apply through RBI’s portal and provide business plan and tech details.
  
  

• Must follow RBI guidelines for KYC, cybersecurity, and reporting.
  
  

• Must get approval from the Department of Payment and Settlement Systems of RBI.
  
  

RBI’s Risk-Based Categorization of NBFCs

To improve supervision, RBI has created a risk-based structure called the Scale-Based Regulation Framework, which divides NBFCs into four layers:

1. Base Layer – Small NBFCs like NBFC-P2P, NBFC-AA, NBFC-Factor.
   
   

2. Middle Layer – Larger NBFCs such as NBFC-ICC, NBFC-MFI.
   
   

3. Upper Layer – Systemically important NBFCs selected by RBI.
   
   

4. Top Layer – Empty layer, to be used if required in the future.
   
   

Each layer has different capital, governance, and compliance requirements.

How to Get an NBFC License Online

You can apply for Online NBFC Registration through the RBI website by:

1. Choosing the right NBFC category based on your business model.
   
   

2. Registering your company under the Companies Act, 2013.
   
   

3. Meeting the minimum Net Owned Fund (NOF) requirement.
   
   

4. Preparing documents like business plan, KYC policy, board resolution, etc.
   
   

5. Submitting the application through the COSMOS portal of RBI.
   
   

6. Waiting for RBI’s review and approval.
   
   

Conclusion

NBFCs offer many services and work under different categories. The RBI has framed specific norms for each NBFC type to ensure they work responsibly and transparently. Whether you want to start a loan company, peer-to-peer platform, or a digital wallet service, you must follow the right guidelines and get registered properly.

Getting the correct license—whether it’s NBFC Account Aggregator License Online, P2P Lending License Online, or PPI License Apply Online—is the first step toward building a trustworthy and compliant NBFC business.

If you are planning to apply for Online NBFC Registration, it is advisable to consult professionals or legal advisors to avoid delays and mistakes.