NBFC Takeover Services — Acquisition of an Existing RBI-Registered NBFC

Q: Is RBI prior approval always required for NBFC acquisition?

Yes, for acquisitions of 26% or more equity, any change of control, or majority board change. Below 26% non-controlling stakes may only require post-facto intimation.

Q: What is the fit-and-proper criterion in NBFC takeovers?

The RBI tests all incoming directors and significant shareholders for criminal history, regulatory bans, financial track record, and professional experience. Failure is the most common ground for RBI refusal.

Q: How long does RBI prior approval for NBFC takeover take?

Typically 3 to 5 months. Foreign acquirers or complex group structures take longer due to additional FEMA and FDI review.

Q: What key areas should NBFC due diligence cover?

RBI compliance history, loan portfolio quality and NPA levels, capital adequacy, legal proceedings, borrowing agreements, IT systems, and KYC/AML framework.

Q: Can the Certificate of Registration be transferred in an NBFC takeover?

The CoR is issued to the company entity and remains with it after acquisition. It does not need re-issue upon change of ownership, provided the entity name and office are unchanged or changes are notified.

Professional advisory for acquiring a controlling interest in an existing RBI-registered NBFC — covering RBI prior approval, due diligence, share transfer, regulatory filings, and post-takeover compliance restructuring.

RBI Prior Approval

Obtaining mandatory RBI prior approval before completing the acquisition of 26% or more of the paid-up equity of an NBFC — covering application drafting, documentation, and RBI liaison until approval is granted.

NBFC Due Diligence

Comprehensive financial, legal, and regulatory due diligence on the target NBFC — reviewing RBI compliance history, loan portfolio quality, NPA levels, pending regulatory actions, and outstanding liabilities. See our dedicated due diligence services.

Share Transfer Structuring

Structuring of the share purchase agreement, valuation support, stamp duty optimisation, and MCA filings for transfer of shares in the target NBFC post-RBI approval.

Change of Management Filing

Filing of intimations and applications with the RBI for change of directors, change of management, and change of ownership following the completion of the NBFC acquisition.

Regulatory Compliance Audit

Post-takeover audit of the acquired NBFC's RBI compliance status — identifying pending filings, regulatory violations, and remediation actions to be completed before regulatory examination.

NBFC Shell Identification

Identification of suitable dormant or shell NBFCs available for acquisition as an alternative to fresh NBFC registration — saving time while ensuring regulatory cleanliness of the target entity.

Why Acquire an Existing NBFC Instead of Fresh Registration?

Acquiring a registered NBFC can be significantly faster than applying for fresh registration — the Certificate of Registration (CoR) transfers with the entity, saving 3 to 6 months of RBI processing time. Acquirers also inherit an operational history, existing RBI relationship, and in some cases an active loan book and borrowing facilities. However, thorough due diligence is essential to ensure the target is free of regulatory violations, NPAs, and undisclosed liabilities.

RBI Prior Approval Requirements for NBFC Takeover

Prior approval is required for acquisition or transfer of 26% or more of the paid-up equity of an NBFC
Prior approval is required for any takeover or acquisition of control of an NBFC
Change of directors — where the new directors form a majority of the board — requires prior approval
Application must include details of acquirers, source of funds, business plan post-acquisition, and fit-and-proper declarations
The RBI assesses the fit-and-proper status of all incoming directors and substantial shareholders

Frequently Asked Questions

Is RBI prior approval always required for NBFC acquisition? +

Yes, whenever the acquisition involves 26% or more of paid-up equity capital, any change of control, or a majority change in the board of directors. Acquisitions below the 26% threshold for non-controlling stakes do not require prior RBI approval but may require post-facto intimation depending on the circumstances.

What is the fit-and-proper criterion in NBFC takeovers? +

The RBI applies a fit-and-proper test to all incoming directors and shareholders acquiring significant ownership in an NBFC. The criteria include: no criminal conviction, no regulatory ban, no adverse background in financial services, sound financial track record, and requisite professional experience. Failure to meet fit-and-proper criteria is the most common ground for RBI refusal of takeover approval.

How long does RBI prior approval for NBFC takeover take? +

RBI prior approval for NBFC takeover typically takes 3 to 5 months, depending on the complexity of the transaction, number of incoming shareholders, and query cycles. Applications involving foreign acquirers or complex group structures take longer due to additional FEMA and FDI compliance review.

What key areas should NBFC due diligence cover? +

NBFC due diligence should cover: RBI compliance history and pending supervisory actions; loan portfolio quality including NPA levels and provisioning adequacy; capital adequacy ratio and leverage position; legal proceedings and contingent liabilities; borrowing agreements and covenant compliance; IT systems and KYC/AML framework; and management information systems. See our due diligence services for comprehensive coverage.

Can the Certificate of Registration be transferred in an NBFC takeover? +

The Certificate of Registration is issued to the company entity, not its shareholders — so it remains with the entity after the acquisition. The acquirer effectively gains control of a company that already holds an RBI CoR. The CoR does not need to be re-issued upon change of ownership, provided the entity's name and registered office remain unchanged or changes are notified to the RBI.

Acquire a Registered NBFC — Faster Than Fresh Registration

Expert NBFC takeover advisory — due diligence, RBI prior approval, and post-acquisition compliance.

F.A.Q.

What is GSTR-9 and why is it required?

GSTR-9 is an annual GST return that summarizes all transactions reported during the financial year. It is required to ensure proper reconciliation and compliance with GST laws.

Who is required to file GSTR-9?

All regular GST-registered taxpayers are required to file GSTR-9, except composition dealers, casual taxable persons, and non-resident taxpayers.

What is the due date for filing GSTR-9?

The due date is generally 31st December following the end of the relevant financial year, unless extended by the government.

What details are included in GSTR-9?

It includes details of outward supplies, inward supplies, input tax credit claimed, taxes paid, and adjustments made during the year.

Is GSTR-9 mandatory for all taxpayers?

GSTR-9 is mandatory for most regular taxpayers, but certain small taxpayers may get exemptions based on turnover thresholds notified by the government.

What happens if GSTR-9 is not filed on time?

Late filing may result in penalties and late fees, along with potential compliance issues or notices from GST authorities.