What is the Compliance and Return procedure for NBFCs?

CS Ravi Shankar , Last updated: 08 May 2020
Share

The Non-Banking Financial Companies (NBFCs) are required to submit various returns to RBI w.r.t their deposit acceptance, prudential norms compliance, ALM etc. in accordance with Master Direction- Non-Banking Financial Company Returns (Reserve Bank) Directions, 2016. The master directions lay down the foundation for RBI compliant and safe NBFC operational practices. NBFC Compliances and Returns are comprehensive and need to be read carefully so as to avoid penal action by RBI.

Return to be submitted by Non-Deposit Taking NBFC

NBFC having assets size below Rs. 100 Cr (NBFC-ND)

Sl. No.	Name of Return	Periodicity	Time Period	Details
1	Branch Info Return	Quarterly	15 days	Branch Details. NBFC having assets size of Rs. 50 cr and above.
2	Overseas Investment Return	Quarterly	15 days	Return to be submitted by NBFCs having overseas investment.
3	Return on FDI	Half Yearly	30 days	To capture compliance with the stipulated minimum capitalization norms
4	NBS-9	Annually	60 days	Annual Return
5	SAC	Annually	1 month	Statutory Auditor Certificate within 1 month from the date of finalisation of Balance Sheet. Not later than 31st December.

NBFC having assets size Rs. 100 – 500 Cr (NBFC-ND)

Sl. No.	Name of Return	Periodicity	Time Period	Details
1	Return on Important Financial Parameters	Monthly	7 days	Sources and Application of Funds, Profit and Loss Account, Asset Classification etc.
2	ALM-1	Quarterly	15 days	Statement of Short Term Dynamic Liquidity
3	Branch Info Return	Quarterly	15 days	Branch Details
4	Overseas Investment Return	Quarterly	15 days	Return to be submitted by NBFCs having overseas investment.
5	Return on FDI	Half Yearly	30 days	To capture compliance with the stipulated minimum capitalization norms
6	ALM-2	Half Yearly	30 days	Statement of Structural Liquidity
7	ALM-3	Half Yearly	30 days	Interest Rate Sensitivity
8	ALM Yearly	Annually	15 days	Disclosure in Balance Sheet. CRAR, Exp to Real Estate,
9	NBS-8	Annually	60 days	Annual Return
10	SAC	Annually	1 month	Statutory Auditor Certificate within 1 month from the date of finalisation of Balance Sheet. Not later than 31st December.

NBFC having assets size Rs. 500 Cr and above (NBFC-ND-SI)

Sl. No.	Name of Return	Periodicity	Time Period	Details
1	Return on Important Financial Parameters	Monthly	7 days	Sources and Application of Funds, Profit and Loss Account, Asset Classification etc.
2	ALM-1	Quarterly	15 days	Statement of Short Term Dynamic Liquidity
3	Branch Info Return	Quarterly	15 days	Branch Details
4	NBS-7	Quarterly	15 days	Quarterly Return of Capital Funds, Risk-Asset Ratio (Supervisory Return)
5	Overseas Investment Return	Quarterly	15 days	Return to be submitted by NBFCs having overseas investment.
6	CRILC	Quarterly	21 days	Reporting to Central Repository of Information on Large Credits
7	Return on FDI	Half Yearly	30 days	To capture compliance with the stipulated minimum capitalization norms
8	ALM-2	Half Yearly	30 days	Statement of Structural Liquidity
9	ALM-3	Half Yearly	30 days	Interest Rate Sensitivity
10	ALM Yearly	Annually	15 days	Disclosure in Balance Sheet. CRAR, Exp to Real Estate,
11	NBS-8	Annually	60 days	Annual Return
12	SAC	Annually	1 month	Statutory Auditor Certificate within 1 month from the date of finalisation of Balance Sheet. Not later than 31st December.
13	SMA-2 Return	Weekly	On Every Friday	Reporting of Special Mention Account status

As at the end of March every year, all NBFCs are required to submit;

An annual certificate duly certified by the Statutory Auditors that the company is engaged in the business of NBFI requiring it to hold the CoR.
The certificate shall also indicate the asset / income pattern of the NBFC for making it eligible for classification as AFC, Investment Company, or Loan Company.
Audited financial statement along with Directors Report.
Board Resolution of non-acceptance of public deposit by non-deposit taking NBFC.
an annual return on Foreign Liabilities and Assets (FLA) by 15th July every year.

Return to be submitted by Deposit Taking NBFC

Deposit taking NBFC (NBFC-D)

Sl. No.	Name of Return	Periodicity	Time Period	Details
1	NBS-1	Quarterly	15 days	Details of Assets and Liabilities
2	NBS-2	Quarterly	15 days	Statement of Capital Funds, Risk Assets etc.
3	NBS-3	Quarterly	15 days	Return on Statutory Liquid Assets as per Section 45 IB of the Act
4	NBS-6	Monthly	7 days	Details of Capital Market Exposure. NBFCs-D having public deposit of > ₹ 20 crore Or asset size of> ₹ 100 crore
5	Overseas Investment Return	Quarterly	15 days	Return to be submitted by NBFCs having overseas investment.
6	Branch info return	Quarterly	15 days	Branch Details
7	CRILC	Quarterly	21 days	Reporting to Central Repository of Information on Large Credits
8	ALM (NBFC-D)	Half yearly	30 days	NBFCs-D having public deposit of > ₹ 20 crore Or asset size of> ₹ 100 crore
9	Return on FDI	Half Yearly	30 days	To capture compliance with the stipulated minimum capitalization norms
10	NBS-8	Annually	60 days	Annual Return
11	SAC	Annually	1 month	Statutory Auditor Certificate within 1 month from the date of finalisation of Balance Sheet. Not later than 31st December.
12	SMA-2 Return	Weekly	On Every Friday	Reporting of Special Mention Account status

Key Notes:-

All the NBFCs are required to put in place a reporting system for filing various returns within the prescribed timeframe. There should not be delay in submission of return for any reason such as the finalization/completion of the Audit of the annual accounts.
The returns shall be filed on-line by an authorised official of the NBFC, who will be specifically authorised in this regard by the Board of Directors.
The NBFCs need to strictly adhere to the timeframe fixed for submitting returns to RBI failing which concerned NBFCs would be liable for penal action as prescribed under the provisions of Chapter V of the RBI Act.
It may be carefully noted that in case the information/particulars furnished by a NBFCs is found incorrect, Reserve Bank of India would take a serious view in the matter.

Disclaimer: This document developed for academic purposes only, is based on the information available in public domain. The author shall not be responsible for any loss or damage caused due to any action taken on the basis of information contained in this document. Any person wishing to act on the basis of the information contained in this document should do so only after cross checking with the original source.