Checklist of NBFC Annual Compliance - Enterslice

NBFC Annual Compliance Checklist

Non-Banking Financial Companies are playing a vital role in the development and upliftment of the infrastructure, economic development, creation of wealth, employment generation and especially have focused on the weaker sections of the society. NBFC Registration with RBI are offering a varied range of products to carry out a new segment, such as financing, leasing, housing finance and gold loans i.e. consumer durable finance by taking into consideration the following factors-

• Major focus on the customer segment by providing customized products offering and products.
• Optimize business model through improved efficiency and enhanced experience.

Through the new and advanced technology, NBFCs are providing financial services to the various sectors of the society to the consumers to maintain a direct link and communication with them.

Types of NBFC Registration: 

Based on the kind of activities they carry, NBFCs are of 3 types- 

• NBFCs accepting deposits (Deposit-taking NBFCs);
• Non-deposit taking NBFCs (NBFC-ND);
• NBFC-ND-Systematically Important (NBFC-ND-SI).

Annual Compliance of NBFC

Operating the Registration of NBFC and following the Annual Compliance is equally important. The Annual Compliance checklist helps the NBFC in filing the return on time. RBI compliances are getting tougher for NBFCs and making efforts for preventing speculation in NBFCs. Hence proper compliance is required to be followed by the NBFC Companies to save from hefty penalties. The checklist of Annual Compliance indicates the due date for filing return that every NBFC has to file. The compliances are required to be done on Annual Compliance, Monthly Compliances and Periodical Compliances.

• Annual Compliance Checklist: NBFCs are required to file the below-mentioned Compliances within the specified time limit-

1. March Monthly Return (Unaudited)-On or Before 30th June,
2. Statutory Auditors certificate on Income & Assets-On or Before 30th June
3. Intimation about Companies having FDI/Foreign Funding- On or Before 30th  June
4. Audited March Monthly return/NBS-7-Upon completion
5. Filing the audited Balance sheet and P&L Account-Within 1 month from the date of signing the Balance sheet and P&L Account.
6. Non-Acceptance of Public Deposit Resolution- Before the commencement of the new Financial year.
7. Auditor’s Declaration to Act as an Auditor of the Company-On Annual Basis.

Note- NBFC-Non deposit category is required to submit an Annual statement of capital which can be submitted either electronically or physically.

• Monthly Compliances: Monthly returns are required to be filed by the 7th of Every month.

• Periodical Compliances:

1. Appointment and Resignation of Director-Intimation to the ROC in Form DIR-12 within 30 days from the date of Appointment.
2. The intimation is also required to be provided to the RBI.
3. Adoption of any notification in the Board meeting and filing the certified copy with RBI.

VARIOUS RETURNS TO BE FILED BY NBFC(Non-Deposits)-SI and NBFC-SI

Category NBFC Annual Compliance (Deposit Taking):

• NBS-1 return: NBS-1 return is required to be filed by every NBFC Annual Compliance on a quarterly basis that accepts or holds public deposits. The purpose of filing NBS-1 return is to apprehend the financial information such as Profit and Loss account, Constituents of Assets and Liabilities, Exposure to sensitive sectors, etc.
• NBS-2: NBS-2 is required to submit on a quarterly basis by the NBFCs which accepts public deposits on Prudential Norms. The motive behind filing the return is to apprehend the compliances related to several cost-effective norms such as Asset Classification, Capital Adequacy, and Provisioning, etc.

• NBS-3-Every deposit-taking NBFC needs to file NBS-3 on every quarter. The objective behind filing this return is to apprehend the details about Statutory Investments in the Liquid States. However, the statutory investments include Fixed Deposits in Schedules Commercial Bank, Central or State Government Securities, etc.
• NBS-4: NBS-4 is an annual return filed by a rejected company holding public deposits which are of the critical parameter. Now, NBS-4 is filed as earlier NBS-5 was filed. Now, NBS-1 is filed quarterly. The motive of filing NBS-4 is to find the repayment status of the rejected NBFCs accepting public deposits.
• NBS-6-NBS-6 is a monthly return filed by NBFC taking deposits on exposure to capital market with total assets equal to or more than Rs. 100 crores.
• Half-yearly Asset Liability Management returns are required to be filed by NBFC accepting public deposits of more than Rs. 20 crores or asset size of above Rs.100 crores.
• Audited Balance sheet and Auditor’s Report 
• Branch Information Return is a quarterly return that needs to submit by every NBFC which accepts or holds public deposits needs to submit.

Category NBFC-ND(SI):

• NBS-7: For NBFC-ND-SI, NBS-7 is a quarterly statement of capital funds, risk asset ratio, risk-weighted assets, etc. which is required to file on every quarter.
• NBFCs-ND-SI must submit monthly returns on Necessary Financial Parameters.
• Branch Information Return is a return required to be filed on quarterly basis.

Further, NBFC- Non-deposit-SI are required to submit Asset Liability Management Returns i.e.-

Note-Asset Liability Management refers to multiple returns that are supposed to be submitted by NBFCs-ND-SI at several intervals.

1. On Monthly Basis (ALM1)- Statement of short-term dynamic liquidity.
2. On Half Yearly Basis (ALM2)- Statement of short-term structural liquidity.
3. On Half Yearly Basis (ALM 3)- Statement of Interest Rate Sensitivity.