NBFC Consultant in Ahmedabad: CA Murli Chandak’s Guide to RBI Registration, the 2026 Exemption and Compliance for Gujarat Family Groups

In short: In Ahmedabad, the NBFC question rarely begins with a founder who wants to open a lending company. More often it begins inside a family group: an investment company that has been quietly extending inter-corporate loans, a partnership that finances dealers and suppliers, or a promoter who wants to formalise supply-chain credit for the group’s own ecosystem. The first task is therefore not the application; it is deciding whether the company must register with the Reserve Bank of India at all, can rely on the exemption RBI introduced with effect from 1 July 2026, or should be restructured before anything is filed. Where registration is required, a new NBFC-Investment and Credit Company needs a minimum Net Owned Fund of ₹10 crore, the application is filed on RBI’s PRAVAAH portal, and the physical set goes to RBI’s Ahmedabad Regional Office, which has jurisdiction over Gujarat. This guide sets out that decision, the categories and capital thresholds, the registration route, the document and policy set, compliance after registration, and the way I work with Gujarat promoters on each stage.

By CA Murli Chandak, FCA, Fellow Chartered Accountant and IBBI-Registered Valuer (Securities or Financial Assets), registration IBBI/RV/07/2021/14408, with 8+ years in valuation, audit and advisory practice, based in Ahmedabad. Regulatory positions are stated as at September 2026.

Contents

1. 1. Why NBFC Questions in Ahmedabad Usually Start Inside a Family Group
2. 2. What an NBFC Is, and the Test That Decides It
3. 3. The First Decision: Register, Rely on the 2026 Exemption, or Restructure
4. 4. NBFC Categories and Minimum Net Owned Fund
5. 5. Eligibility Requirements the RBI Examines
6. 6. The Registration Route for a Gujarat Company
7. 7. Documents and Board-Approved Policies
8. 8. Compliance Once the Certificate of Registration Is Issued
9. 9. Customer-Facing Obligations
10. 10. Public Deposits: What a Registration Does Not Permit
11. 11. Choosing an NBFC Consultant in Ahmedabad
12. 12. Understanding the Cost of an NBFC Engagement
13. 13. How I Support Ahmedabad and Gujarat Promoters
14. 14. Frequently Asked Questions
15. 15. Conclusion and Contact

1. Why NBFC Questions in Ahmedabad Usually Start Inside a Family Group

Ahmedabad’s economy is built on textiles, chemicals, pharmaceuticals, engineering, real estate and a very large base of family-owned MSMEs. Many of these groups have, over a generation, accumulated surplus funds in holding or investment companies, and those funds are frequently lent to group entities, dealers or suppliers. The proximity of GIFT City in Gandhinagar has also brought financial-services and fintech talent into the region, and some second-generation promoters now want to convert informal group financing into a regulated credit business.

Three situations account for most of the NBFC conversations I have with Gujarat promoters:

1. The unintended NBFC: a group investment company whose balance sheet has drifted into satisfying the RBI’s principal business test without anyone having decided to become a lender.
2. The partnership lender: a finance business run through a partnership firm or LLP, which cannot hold a Certificate of Registration (CoR) and must be moved into a company before it can register.
3. The planned lender: a promoter group that intends to finance vehicles, equipment, MSME working capital or its own supply chain, and needs the category, capital and business plan settled before incorporation.

Each of these calls for a different first step, which is why this guide places the “should we register at all” analysis ahead of the registration mechanics.

2. What an NBFC Is, and the Test That Decides It

2.1 The Legal Position

A non-banking financial company is a company whose business includes loans and advances, acquisition of shares, stocks, bonds, debentures or other marketable securities, leasing, hire-purchase and similar financial activities. Under Section 45-IA of the Reserve Bank of India Act, 1934, such a company cannot commence or carry on the business of a non-banking financial institution without a CoR from the RBI and the prescribed Net Owned Fund, unless an exemption applies. Carrying on the business in contravention of Section 45-IA is an offence; Section 58B(4A) of the Act provides for imprisonment of one to five years and a fine of ₹1 lakh to ₹5 lakh.

2.2 The Principal Business Test

The RBI treats a company as carrying on financial activity as its principal business when, on its last audited balance sheet, both of the following hold:

1. financial assets are more than 50 percent of total assets (netted off by intangible assets); and
2. income from financial assets is more than 50 percent of gross income.

For a Gujarat group company, the practical point is that both limbs are measured on the audited balance sheet, not on intention. A company holding group investments and extending inter-corporate loans can satisfy both limbs in a year when its operating income falls, and I review this test at the balance-sheet stage for group investment companies rather than after the year has closed.

2.3 NBFC and Bank Compared

Aspect	Bank	NBFC
Demand deposits	Accepted	Not permitted
Payment and settlement system	Participates; issues cheques drawn on itself	Does not participate; cannot issue cheques drawn on itself
Deposit insurance	Eligible deposits insured by DICGC	No DICGC cover for depositors
Principal legislation	Banking Regulation Act, 1949 and RBI Act, 1934	RBI Act, 1934, Companies Act, 2013 and RBI Directions

3. The First Decision: Register, Rely on the 2026 Exemption, or Restructure

3.1 What the 2026 Amendment Directions Changed

On 29 April 2026, the RBI issued the Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation) Amendment Directions, 2026, which came into force on 1 July 2026. They sort companies into three positions:

Position	Profile	Registration
Unregistered Type I NBFC	No public funds (direct or indirect), no customer interface, asset size below ₹1,000 crore on the latest audited balance sheet	Exempt from Sections 45-IA and 45-IC, subject to conditions
Type I NBFC	Same profile, asset size of ₹1,000 crore or more	Registration required as Type I
Type II NBFC	Avails public funds or has a customer interface	Registration required under the standard framework

3.2 Why the Exemption Needs Careful Testing for Family Groups

The exemption looks tailored to Gujarat’s group investment companies, but four features of the framework deserve attention before a promoter relies on it:

1. Public funds are defined widely. The RBI’s definition extends beyond public deposits to funds raised directly or indirectly through inter-corporate deposits, bank finance and other outside sources. A group company that funds its loans with a bank facility or inter-corporate deposits may not qualify, even if it has never dealt with the public.
2. Group asset sizes are aggregated. Where a group has more than one Unregistered Type I NBFC, their asset sizes are added together for the ₹1,000 crore threshold. Several modest companies in one family group can therefore cross the line collectively.
3. Customer interface is also defined broadly. Lending to parties outside the permitted boundary can create a customer interface; loans to employees strictly under employment terms and on a non-commercial basis are a stated carve-out.
4. The conditions continue every year. The framework expects an annual board resolution confirming that the company will not avail public funds or have a customer interface, disclosure of the company’s status, and a commitment to register if its profile changes. Statutory auditors are required to report any breach of these conditions to the RBI.

3.3 Existing Registered NBFCs

A company that already holds a CoR and meets the exemption criteria is not converted automatically. It must apply to the RBI for deregistration through PRAVAAH, with the one-time window for existing entities closing on 31 December 2026. The application is supported by audited financial statements for the last three financial years, a statutory auditor’s certificate and board resolutions and undertakings. For a Gujarat group weighing this route, the three-year look-back is often the deciding factor: the financial statements must show that the qualifying conditions were in fact met, not merely that they will be met from now on.

3.4 When Restructuring Comes First

Where a company fails the exemption only because of a specific funding line or a specific set of loans, the right answer may be to restructure those arrangements, with appropriate tax and Companies Act analysis, before choosing between exemption and registration. This is a decision for the board, taken on advice, and it should be documented.

4. NBFC Categories and Minimum Net Owned Fund

The category selected sets the capital floor, the permitted activities and the compliance load for the life of the company.

Category	Nature of Activity	Minimum NOF (New Applicants)
NBFC-ICC (Investment and Credit Company)	Lending and investment; the most common route for Gujarat vehicle, equipment and MSME financiers	₹10 crore
NBFC-MFI	Collateral-free microfinance to low-income households, subject to income and lending caps	₹10 crore
NBFC-Factor	Acquisition of trade receivables as principal business; relevant to supply-chain finance for textile and chemical supply chains	₹10 crore
Housing Finance Company	Housing finance as principal business; regulated by the RBI since 2019	₹20 crore
NBFC-IFC / IDF-NBFC	Long-tenor infrastructure financing	₹300 crore
Core Investment Company (CIC)	Holds investments predominantly in group companies	Registration applies at an asset size of ₹100 crore and above with public funds; separate capital framework
NBFC-P2P	Online platform matching lenders and borrowers, without lending on its own book	₹2 crore
NBFC-AA (Account Aggregator)	Consent-based sharing of financial information	₹2 crore
Mortgage Guarantee Company	Guarantees mortgage loans	₹100 crore

Note for existing NBFCs: NBFC-ICCs, NBFC-MFIs and NBFC-Factors registered before 1 October 2022 with a lower NOF are on a glide path that reaches ₹10 crore by 31 March 2027. Gujarat NBFCs on that path should plan the capital infusion, and the related shareholding and valuation work, well ahead of the deadline.

ICC or CIC: for a family group whose company mainly holds group investments, the choice between an NBFC-ICC and a CIC structure, or the 2026 exemption, should be settled before incorporation or restructuring. It is far more expensive to change category after a business plan and policy set have been built for the wrong one.

5. Eligibility Requirements the RBI Examines

1. Corporate form: only a company incorporated under the Companies Act can hold a CoR. A partnership firm, LLP or proprietorship running a finance business must first move the business into a company, which raises its own questions on transfer of the loan book, stamp duty and taxation.
2. Net Owned Fund: paid-up equity capital and free reserves, less accumulated losses, deferred revenue expenditure and other intangible assets, and adjusted for specified investments in and loans to group companies. Because group exposures are common in Gujarat family structures, the NOF can be materially lower than the headline capital.
3. Principal business test: the proposed model must meet the 50-50 test described in Section 2.2.
4. Fit and proper criteria: promoters, directors and significant shareholders must have a sound reputation and a clean regulatory record, and the RBI expects relevant banking or financial-services experience on the board. Many family groups need to add an experienced independent or whole-time director to meet this expectation.
5. Business plan: a five-year plan specific to the company, covering products, borrower segments, geography, funding, organisation and risk controls.
6. Source of funds and ownership: a transparent shareholding structure and documented source of the capital brought in.

6. The Registration Route for a Gujarat Company

1. Assess the model and the exemption. Confirm products, borrowers, funding and the category, and complete the analysis in Section 3 before any capital is committed.
2. Incorporate or restructure the company. Frame the object clause to cover the financial activity, obtain DIN and DSC for each proposed director, and settle the board against the fit and proper criteria.
3. Bring in and evidence the capital. Infuse the NOF and hold it in an unencumbered fixed deposit with a scheduled commercial bank, supported by the bank’s lien-free confirmation and the statutory auditor’s NOF certificate, with both documents agreeing in every particular.
4. Prepare the business plan, projections, declarations and policies described in Section 7.
5. File on PRAVAAH. Since 1 May 2025, applications have been filed on the RBI’s PRAVAAH portal, which replaced COSMOS. A Company Application Reference Number (CARN) is generated on submission.
6. Submit the physical application with the CARN acknowledgement to the RBI Regional Office having jurisdiction over the registered office. For a company registered in Gujarat, this is the RBI Ahmedabad Regional Office, whose jurisdiction covers the State of Gujarat and the Union Territory of Dadra and Nagar Haveli and Daman and Diu.
7. Answer the RBI’s queries with documented, point-by-point replies.
8. Receive the decision. The RBI grants the CoR once satisfied, or returns or rejects the application. Section 45-IA prescribes no time limit for the decision, and the elapsed time depends heavily on how complete the application is on the day it is filed. Lending may begin only after the CoR is received.

7. Documents and Board-Approved Policies

The RBI publishes the application forms and an indicative checklist, which are revised from time to time. The principal groups are:

Group	Indicative Contents
Corporate	Certificate of Incorporation, MoA, AoA and board resolutions authorising the application
Promoters and directors	Profiles, KYC, experience, credit reports and declarations
Ownership	Shareholding pattern, group chart and ultimate beneficial ownership
Business plan and projections	Five-year plan with projected profit and loss account, balance sheet and cash flows
Capital	Bank’s lien-free confirmation, statutory auditor’s NOF certificate, audited financials and source-of-funds evidence
Credit	Appraisal, sanction, pricing, monitoring, collection and recovery policies
KYC and AML	KYC policy aligned with the RBI KYC Directions and PMLA obligations
Customer	Fair Practices Code, interest rate policy and grievance redressal mechanism
Risk	Risk management framework, asset-liability management and internal controls
Digital lending (where applicable)	Lending Service Provider and Default Loss Guarantee arrangements
Loan documentation	Draft loan agreements, sanction letters, Key Facts Statement and disclosure formats

8. Compliance Once the Certificate of Registration Is Issued

8.1 The Compliance Calendar

1. RBI returns at the frequency applicable to the NBFC’s layer and category.
2. Capital: a minimum Capital to Risk-Weighted Assets Ratio (CRAR) of 15 percent for NBFCs to which it applies, and leverage limits for Base Layer NBFCs.
3. Income recognition, asset classification and provisioning, including timely identification of non-performing assets.
4. Liquidity and asset-liability management proportionate to the NBFC’s size.
5. Governance: board committees, periodic fit and proper reviews and a compliance function suited to the layer.
6. Audit and reporting: statutory audit, auditor reporting to the RBI, financial-statement disclosures and concurrent audit where applicable.
7. KYC and AML: customer due diligence, record keeping and reporting to FIU-IND.
8. Grievance redressal and compliance with the RBI Integrated Ombudsman Scheme.
9. Corporate, accounting and tax compliance: Companies Act filings, Ind AS where applicable, and income tax and GST obligations.

Where the RBI finds a contravention in an operating NBFC, it can impose monetary penalties under Section 58G of the RBI Act, and it retains the power to cancel a CoR under Section 45-IA(6). A compliance calendar owned by a named person from the first day of registration is the practical safeguard.

8.2 Scale Based Regulation

Layer	Broad Coverage
Base Layer	Non-deposit-taking NBFCs below ₹1,000 crore in assets, and categories such as NBFC-P2P and NBFC-AA
Middle Layer	Deposit-taking NBFCs, non-deposit-taking NBFCs of ₹1,000 crore and above, and categories such as HFCs, IFCs, CICs and SPDs
Upper Layer	NBFCs specifically identified by the RBI for enhanced regulation
Top Layer	Expected to remain empty; populated only if the RBI sees a substantial increase in systemic risk

9. Customer-Facing Obligations

1. Transparent pricing: the interest rate, processing fees and all other charges communicated clearly.
2. Repayment terms: schedules, instalment amounts and the consequences of delay set out in writing.
3. Penal charges: levied as penal charges rather than added to the interest rate, and disclosed upfront.
4. Security: clear terms for creation and release of security, and timely return of original property documents on closure of the loan.
5. Prepayment and foreclosure: transparent conditions and charges, subject to RBI restrictions.
6. Key Facts Statement: provided for applicable retail and MSME loans before the contract is executed.
7. Digital lending safeguards: borrower consent, data minimisation and disclosure of Lending Service Provider arrangements.
8. Grievance redressal: a designated grievance officer, a published escalation matrix and information on the RBI Integrated Ombudsman Scheme.

10. Public Deposits: What a Registration Does Not Permit

A CoR does not by itself authorise an NBFC to accept public deposits. Only NBFCs holding a specific RBI authorisation for deposit-taking, and continuing to meet its conditions, may do so, and most NBFCs registered today are non-deposit-taking. Deposits with NBFCs, including authorised deposit-taking NBFCs, are not covered by DICGC insurance.

This matters in Gujarat, where informal deposit-taking by family concerns has a long history. Accepting deposits without authorisation, or advertising returns that imply regulatory backing, exposes the company and its directors to serious consequences. Members of the public can verify an NBFC’s registration and deposit-taking status on the RBI website.

11. Choosing an NBFC Consultant in Ahmedabad

11.1 What to Look For

1. Financial and certification capability: the ability to compute and evidence the NOF, build defensible projections and read a group balance sheet against the principal business test.
2. Current regulatory knowledge: familiarity with PRAVAAH, current NOF thresholds and the 2026 Amendment Directions.
3. Category experience: understanding of the category you propose, whether ICC, Factor, MFI, P2P, AA or CIC.
4. Lending and risk understanding: credit appraisal, collections, ALM and provisioning.
5. Coordinated support: working alongside Company Secretaries, legal counsel and the statutory auditor in Gujarat.
6. Continuity after registration: the capacity to manage returns, audits and regulatory change.
7. Written scope: a formal engagement letter setting out deliverables, exclusions and fees.

11.2 Warning Signs

1. Assurances of RBI approval or of a fixed approval date.
2. Suggestions that capital can be shown temporarily or borrowed for the application.
3. Advice to start lending before the CoR is received.
4. Claims that every NBFC may accept public deposits.
5. No engagement letter, cash-only payments or claims of special access to regulators.
6. Outdated statements, such as a ₹2 crore NOF for NBFC-ICC or filing on COSMOS.

11.3 Questions to Ask Before Appointment

1. Does our company need to register, or does the 2026 exemption apply to us and to our group as a whole?
2. Which category fits our model, and what NOF will be required after group adjustments?
3. If we run finance activity through a partnership or LLP today, how will it move into a company?
4. Who will prepare the five-year plan and projections?
5. Which policies, agreements and customer documents are included?
6. How will RBI queries be handled?
7. What support is included after the CoR is issued?

12. Understanding the Cost of an NBFC Engagement

There is no standard fee, and a promoter should see three items separately before work begins:

1. Capital: the NOF is the company’s own money, deployed later in the lending business; it is not an expense.
2. Regulatory and incidental costs: any application fee prescribed by the RBI, incorporation or restructuring costs, stamp duty, notarisation and certification charges. Published figures for the RBI fee under PRAVAAH are not consistent, so the current position should be checked against the RBI’s own material at the time of filing.
3. Professional fees: driven mainly by whether the engagement begins with an exemption or restructuring analysis, the category, the complexity of the group structure, the depth of the business plan, any digital lending arrangements and whether post-registration compliance is included.

13. How I Support Ahmedabad and Gujarat Promoters

1. Register-or-exempt analysis: testing the company, and the group as a whole, against the principal business test and the 2026 exemption conditions, including the three-year look-back for deregistration.
2. Restructuring input: the financial and valuation work where a partnership or LLP finance business moves into a company, or where group funding lines need to be reorganised.
3. NOF computation and certification support, including the group-exposure adjustments that most affect Gujarat family structures.
4. Five-year business plan and projections built from the company’s own model, together with the fit and proper file.
5. PRAVAAH filing and the physical application for the RBI Ahmedabad Regional Office, and replies to RBI queries through to the CoR.
6. Post-registration support: the compliance calendar, concurrent audit where the NBFC’s scale requires it, and share valuations when the NBFC later raises capital, issues ESOPs or changes ownership.

14. Frequently Asked Questions

Q1. Our family investment company lends to group companies. Is it an NBFC?

A: It may be. If its last audited balance sheet shows financial assets above 50 percent of total assets and financial income above 50 percent of gross income, it meets the principal business test. Whether it must then register depends on its funding, its customer interface and the combined asset size of the group’s qualifying companies under the 2026 Amendment Directions.

Q2. Does the 2026 exemption apply if our company uses a bank overdraft?

A: Bank finance falls within the RBI’s definition of public funds, so a company funding its financial activity through a bank facility should not assume it qualifies. The facts need to be examined before the company relies on the exemption.

Q3. We already hold a CoR but do not deal with customers. Can we exit?

A: If you meet the exemption criteria, you may apply for deregistration through PRAVAAH. For existing entities, the one-time window closes on 31 December 2026, and the application is supported by three years of audited financial statements and the prescribed certificates and board resolutions.

Q4. Our partnership firm finances vehicles. Can it register as an NBFC?

A: No. Only a company can hold a CoR, so the business must first move into a company, with the transfer of the loan book, stamp duty and tax consequences planned in advance.

Q5. Where is the physical application submitted for a Gujarat company?

A: To the RBI Ahmedabad Regional Office, which has jurisdiction over Gujarat and the Union Territory of Dadra and Nagar Haveli and Daman and Diu, after the online filing on PRAVAAH.

Q6. What capital does a new NBFC-ICC need?

A: A minimum Net Owned Fund of ₹10 crore, held unencumbered and supported by the statutory auditor’s certificate. Group investments and loans can reduce the NOF, so the computation should be done before the capital is finalised.

Q7. Is an NBFC-Factor useful for a textile or chemical supply chain?

A: It can be, where purchasing receivables will genuinely be the principal business. The category carries the same ₹10 crore NOF as an ICC, and the decision should be weighed against the flexibility of the ICC category.

Q8. Can a newly registered NBFC accept deposits from relatives and friends of the promoters?

A: A CoR alone does not permit acceptance of public deposits. Any proposal to raise funds from individuals needs to be examined against the RBI’s deposit rules before any money is accepted.

Q9. Is there a fixed timeline for RBI approval?

A: No. Section 45-IA prescribes no time limit, and the time taken depends largely on how complete and consistent the application is when filed.

Q10. Where can a borrower complain about an NBFC?

A: First to the NBFC’s grievance redressal officer, and then under the RBI Integrated Ombudsman Scheme through the RBI’s Complaint Management System.

15. Conclusion and Contact

For most Ahmedabad promoters, the most valuable work on an NBFC happens before the application: deciding whether registration is needed at all, choosing the right category, moving the business into the right corporate form and computing a Net Owned Fund that survives the RBI’s scrutiny. Once registered, the company needs a compliance calendar that runs every year, not only when the RBI writes. Promoters should confirm the latest RBI requirements before acting and should engage an advisor who is transparent about scope and fees.

If your company is evaluating an NBFC registration, testing the 2026 exemption for your group, or setting up compliance after registration, I would be glad to discuss it.

CA Murli Chandak – FCA | IBBI-Registered Valuer (Securities or Financial Assets) | IBBI/RV/07/2021/14408
Website: murlichandak.com
Phone: +91 99985 39902
Email: murlichandak@murlichandak.com
LinkedIn: Connect with CA Murli Chandak

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Related reading: Registered Valuer in Ahmedabad | Company Registration in Ahmedabad | Virtual CFO in Ahmedabad | GST Consultant in Ahmedabad | ESOP Consultant in Ahmedabad | NBFC Consultant in Mumbai

Disclaimer: This article is intended for general guidance only and does not constitute legal, financial or regulatory advice. Regulatory positions are stated as at September 2026 with reference to the Reserve Bank of India Act, 1934, the RBI’s Scale Based Regulation framework, the Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation) Amendment Directions, 2026 (issued 29 April 2026, effective 1 July 2026) and PRAVAAH portal material. Thresholds, conditions, fees and procedures are revised from time to time and should be confirmed against the RBI’s current notifications on the date of any decision or filing.