The financial industry in India is changing fast. As we step into 2025, two sectors are catching the attention of startups and investors — NBFCs (Non-Banking Financial Companies) and FinTech (Financial Technology). Both offer great opportunities, but the big question is: Which one should you start in 2025 — an NBFC or a FinTech company?

In this blog, Corpbiz helps you understand the key differences, benefits, challenges, and licenses involved in both models, so you can make a smart and informed decision.

What is an NBFC?

An NBFC is a financial institution registered under the Companies Act, 2013, that provides financial services like loans, asset financing, leasing, investments, and more — without holding a banking license. However, it must Apply NBFC License with RBI to operate legally.

Key Features of NBFCs:

• Cannot accept demand deposits like banks.
• Must follow RBI regulations.
• Offer credit and financial products to individuals and businesses.
• Needs high capital and compliance.

What is a FinTech Company?

FinTech is a technology-driven financial business. It uses software, apps, APIs, and cloud computing to provide faster, digital, and affordable financial services. FinTech models are usually more flexible, innovative, and less capital-intensive than NBFCs.

Key Features of FinTech:

• Uses digital platforms for lending, payments, and aggregating data.
• Often partners with NBFCs or banks.
• Requires tech infrastructure and innovation.
• Needs specific licenses like the RBI aggregator license, PPI license, or P2P lending license, depending on the service.

NBFC vs FinTech: Key Differences

Licensing Process for NBFC FinTech in India

✅ Apply for NBFC License with RBI

To start an NBFC, you need:

• A registered company under Companies Act, 2013.
• ₹2 crore minimum net owned funds.
• A clean credit and background history.
• Approval from RBI after application and documentation.

✅ Apply P2P Lending License in India

If you want to run a peer-to-peer lending platform, then you need to apply P2P lending license in India. 

• Register as a company.
• Meet the minimum net worth of ₹2 crore.
• Apply to RBI with documents.
• Get certified as a P2P NBFC.

✅ Apply PPI License in India

If your FinTech wants to offer digital wallets:

• Register with RBI under Payment and Settlement Systems Act.
• Show technical capability, cybersecurity measures, and capital adequacy.
• RBI grants PPI (Prepaid Payment Instruments) license after thorough checks.

✅ RBI Aggregator License

This is required for account aggregators who handle customer financial data securely:

• Must register with RBI as NBFC-AA.
• Focus on consent-based data sharing.
• Needs robust data privacy and security systems.

Which One is Better for 2025?

✅ Choose NBFC If:

• You have strong financial capital.
• You want to offer traditional financial services.
• You can handle RBI compliance and audits.
• You're targeting rural or semi-urban markets with credit needs.

✅ Choose FinTech If:

• You have a tech-driven vision.
• You want to scale fast with less investment.
• You are targeting young, digital-savvy customers.
• You’re open to collaboration with NBFCs or banks.

Top FinTech Business Models to Start in 2025

1. Digital Lending Platforms – Collaborate with NBFCs to offer loans.
2. P2P Lending – Start a licensed lending platform for individuals.
3. Digital Wallets UPI apps – Apply for PPI License in India.
4. Account Aggregator – Apply for the RBI aggregator license to collect and manage financial data.
5. Buy Now, Pay Later (BNPL) – Emerging trend among millennials.

Challenges to Consider

For NBFC:

• High compliance burden.
• Large capital requirement.
• Slower tech adoption.

For FinTech:

• Rapid changes in RBI norms.
• Cybersecurity and data privacy issues.
• Dependency on partnerships with banks/NBFCs.

How Corpbiz Can Help

At Corpbiz, we help startups and entrepreneurs like you choose the right path. Whether you wish to Apply NBFC License with RBI, Apply P2P Lending License in India, or Apply PPI License in India, our experts make the registration and compliance process smooth and hassle-free.

We offer:

• Legal documentation support
• Regulatory guidance
• Licensing assistance
• Business model consultation
• Post-license compliance help

? Talk to our experts today and take the first step toward launching your NBFC or FinTech business in 2025!

FAQs: NBFC vs FinTech

Q1. Can a FinTech company work without an NBFC license?

Yes, depending on the business model. But if your FinTech is lending on its own books, you need to apply for NBFC license with RBI. Otherwise, you can partner with an NBFC.

Q2. How long does it take to get an NBFC license in India?

Usually, it takes 3–6 months if all documents are submitted properly and RBI approves the application.

Q3. Is a P2P lending license the same as an NBFC license?

No. It is a specific category under NBFC called NBFC-P2P. You must Apply P2P Lending License in India separately through RBI.

Q4. Do I need a license to offer digital wallets in India?

Yes. You must Apply PPI License in India from RBI to issue digital wallets or prepaid cards.

Q5. What is the cost of applying for an NBFC license?

It varies but includes a minimum capital of ₹2 crore, government fees, and professional fees. Corpbiz offers complete cost breakdowns based on your model.

Author Bio:

Atul Shukla – Business Compliance Expert at Corpbiz
Atul is a regulatory and startup advisor at Corpbiz with over 8 years of experience in RBI licensing, NBFC advisory, and FinTech startup support. His goal is to make legal compliance simple and accessible for all Indian entrepreneurs.