Non-Banking Financial Companies (NBFCs) play a major role in supporting businesses and individuals with financial services that are not provided by traditional banks. Whether you want to provide loans, manage digital payments, offer peer-to-peer lending, or aggregate financial data, there is an NBFC model for you.
In this blog, we will help you understand different types of NBFCs and how to choose the right one based on your business goals. We will also explain how to get NBFC Registration with RBI and apply for specific licenses such as NBFC Account Aggregator License Online, PPI License, and P2P Lending License Online.
What is an NBFC?
An NBFC is a company registered under the Companies Act, which provides financial services similar to banks but does not hold a banking license. It is regulated by the Reserve Bank of India (RBI) and must follow certain rules and regulations. NBFCs can offer loans, asset financing, investments, insurance, and more.
Why Choose an NBFC for Your Business?
NBFCs allow more flexibility in operations than traditional banks. They are easier to set up and focus on niche markets such as small businesses, low-income individuals, digital lending, and financial technology (fintech) services. If you are an entrepreneur or a startup in the financial sector, an NBFC can be a smart way to start your operations.
Key Types of NBFCs in India
There are several types of NBFCs, each serving a unique business purpose. Here are the main types:
1. NBFC – Investment and Credit Company (NBFC-ICC)
This is the most common type. It offers loans and advances, asset finance, and investment in securities.
Best for: Businesses that want to offer personal loans, business loans, or vehicle finance.
- NBFC – Micro Finance Institution (NBFC-MFI)
These provide small loans to low-income groups, especially in rural and semi-urban areas.
Best for: NGOs or startups targeting financial inclusion.
- NBFC – Factors
They offer factoring services, which means purchasing and managing the receivables of businesses.
Best for: Companies helping small enterprises with cash flow management.
- NBFC – Infrastructure Finance Company (NBFC-IFC)
These NBFCs provide long-term finance for infrastructure projects like roads, airports, or energy.
Best for: Companies focused on large-scale infrastructure development.
- NBFC – Housing Finance Company (NBFC-HFC)
These provide housing loans and are regulated by the National Housing Bank (NHB).
Best for: Real estate developers or companies offering home loans.
- NBFC – Account Aggregator (NBFC-AA)
They help customers access all their financial data in one place by collecting and sharing it with financial service providers (with customer consent).
Best for: Fintech companies working in financial data analytics or personal finance platforms.
Read more: NBFC Account Aggregator License Online
- NBFC – Peer-to-Peer Lending Platform (NBFC-P2P)
These connect borrowers directly with lenders through a digital platform. They do not lend their own funds but provide a marketplace.
Best for: Startups in digital lending or alternative finance.
Read more: P2P Lending License Online
- NBFC – Prepaid Payment Instrument Issuer (NBFC-PPI)
These issue digital wallets and prepaid cards that can be used for payments.
Best for: Businesses offering payment solutions or e-wallets.
Read more: PPI License Apply Online
How to Choose the Right Type of NBFC?
Here are a few questions to help you decide:
? What kind of financial service do you want to provide?
For lending: Choose NBFC-ICC or NBFC-MFI.
For data services: Go for NBFC-AA.
For digital lending: Choose NBFC-P2P.
For e-wallets: Choose NBFC-PPI.
? Who is your target customer?
Rural borrowers – NBFC-MFI
Retail customers – NBFC-ICC or P2P
Small businesses – NBFC-Factors
Digital users – NBFC-PPI or NBFC-AA
? How much capital do you have?
Minimum capital required for a basic NBFC is ₹2 crore. For NBFC-AA, PPI, and P2P, separate guidelines exist. Make sure to check the capital norms as per RBI.
Steps for NBFC Registration with RBI
Follow these steps to register your NBFC with the Reserve Bank of India:
✅ Step 1: Register a Company
You must first register a private or public company under the Companies Act, 2013.
✅ Step 2: Raise Minimum Net Owned Fund
Ensure you meet the minimum capital requirement, usually ₹2 crore for most NBFCs.
✅ Step 3: Prepare Documents
Documents include PAN, CIN, MOA/AOA, bank account proof, fixed deposit receipt, business plan, etc.
✅ Step 4: Apply Online via COSMOS
Submit your NBFC registration application on RBI’s COSMOS portal.
✅ Step 5: Submit Physical Documents
Send the signed hard copies to the RBI regional office.
✅ Step 6: Wait for Approval
Once RBI is satisfied with your documents and eligibility, it will issue a Certificate of Registration.
Conclusion
Choosing the right type of NBFC depends on your business model, services, and customer base. If your focus is on lending, go for NBFC-ICC or P2P. If you're in fintech and data analytics, NBFC-AA is your fit. For payment services, NBFC-PPI is ideal.
Whichever you choose, make sure you get NBFC Registration with RBI and follow all compliance requirements.
Need Help with NBFC Registration?
At Corpbiz, we assist startups and companies in registering various types of NBFCs. Whether you want to apply for a PPI License online, get a P2P Lending License online, or obtain an NBFC Account Aggregator License, our experts make the process smooth and hassle-free.
? Get in touch with Corpbiz today and launch your financial business with full compliance!
✅ Frequently Asked Questions (FAQs)
Q1. What is the minimum capital requirement for NBFC registration with RBI?
The minimum capital requirement for NBFC registration is ₹2 crore. However, specific types like NBFC-MFI, NBFC-AA, or NBFC-P2P may have different requirements.
Q2. Can a startup apply for an NBFC license in India?
Yes, a startup can apply for an NBFC license in India, provided it meets the capital, compliance, and documentation requirements set by the RBI.
Q3. What is an NBFC Account Aggregator License?
An NBFC-AA license allows companies to collect and share users’ financial data with consent, helping individuals access financial services more easily and securely.
Q4. How do I apply for a PPI license online?
You need to apply through the RBI portal by submitting business details, a valid company registration, and fulfilling the capital norms for issuing prepaid payment instruments like wallets or cards.
Q5. What is the difference between NBFC-ICC and NBFC-P2P?
NBFC-ICC provides direct loans and asset financing. NBFC-P2P creates a platform for lenders and borrowers to connect, but does not lend its own funds.
Author
Atul Shukla, Legal Expert at Corpbiz
Keshaw is a seasoned legal and business consultant at Corpbiz, specializing in NBFC registration, RBI licensing, and financial compliance. With years of experience in regulatory advisory and startup consulting, he helps entrepreneurs and fintech companies navigate India’s complex licensing landscape. His writing focuses on making legal processes simple and accessible for all.
For expert assistance, reach out to Corpbiz and let our team guide your NBFC journey.
