1. The starting point: when is registration required?
A company is treated as an NBFC if it satisfies the
principal business criteria (commonly referred to
as the "50-50 test") and carries on the business of a
non-banking financial institution. If it qualifies as an NBFC, it
ordinarily requires a Certificate of Registration (CoR) under
section 45IA of the RBI Act, 1934. The RBI's
consolidated framework for this is set out in the Reserve
Bank of India (Non-Banking Financial Companies –
Registration, Exemptions and Framework for Scale Based Regulation)
Directions, 2025.
However, there are important registration
exemptions which are coming into effect from April 01,
2026 and the most commercially relevant analysis often turns on two
concepts: public funds and customer
interface.
