What licenses are required to launch a fintech lending app under RBI NBFC norms in India?

At the outset, fintech platforms facilitating lending activities are required to comply with the RBI (Digital Lending) Directions, along with applicable KYC/AML and data protection requirements. The precise regulatory framework would, however, depend on whether lending is carried out directly, in partnership with a registered NBFC, or through an intermediary structure.

If the company proposes to undertake lending activities, then such activities are regulated by the Reserve Bank of India (“RBI”) and is required to obtain registration with RBI prior to undertaking any such lending activities. In addition to the banks, NBFCs, establish as a loan company is permitted to undertake lending activities. The NBFC is required to obtain a Certificate of Registration (“CoR”) as a Non-Banking Financial Company (“NBFC”) under either of the applicable category, i.e. NBFC–Investment and Credit Company (NBFC-ICC) or an NBFC–Peer-to-Peer Lending Platform (NBFC-P2P). In additions, a NBFC is required to satisfy eligibility requirement and conditions, such as meeting the prescribed Net Owned Fund (“NOF”) (currently ₹10 crore for most new NBFC entrants) criteria.

Given the evolving regulatory landscape for fintech and digital lending in India, a detailed assessment of your proposed structure would be required to determine the applicable licensing and compliance obligations. We would be happy to assist with this assignment and advise connecting over a brief Teams call to discuss your proposed business model and the applicable regulatory considerations in further detail.

Please note that the above is a preliminary overview and should not be construed as a legal opinion. A comprehensive analysis would follow once we have clarity on your operational model and structure.

At the outset, fintech platforms facilitating lending activities are required to comply with the RBI (Digital Lending) Directions, along with applicable KYC/AML and data protection requirements. The precise regulatory framework would, however, depend on whether lending is carried out directly, in partnership with a registered NBFC, or through an intermediary structure.
If the company proposes to undertake lending activities, then such activities are regulated by the Reserve Bank of India ("RBI") and is required to obtain registration with RBI prior to undertaking any such lending activities. In addition to the banks, NBFCs, establish as a loan company is permitted to undertake lending activities. The NBFC is required to obtain a Certificate of Registration ("CoR") as a Non-Banking Financial Company ("NBFC") under either of the applicable category, i.e. NBFC–Investment and Credit Company (NBFC-ICC) or an NBFC–Peer-to-Peer Lending Platform (NBFC-P2P). In additions, a NBFC is required to satisfy eligibility requirement and conditions, such as meeting the prescribed Net Owned Fund ("NOF") (currently ₹10 crore for most new NBFC entrants) criteria.
Given the evolving regulatory landscape for fintech and digital lending in India, a detailed assessment of your proposed structure would be required to determine the applicable licensing and compliance obligations. We would be happy to assist with this assignment and advise connecting over a brief Teams call to discuss your proposed business model and the applicable regulatory considerations in further detail.
Please note that the above is a preliminary overview and should not be construed as a legal opinion. A comprehensive analysis would follow once we have clarity on your operational model and structure.

At the outset, fintech platforms facilitating lending activities are required to comply with the RBI (Digital Lending) Directions, along with applicable KYC/AML and data protection requirements. The precise regulatory framework would, however, depend on whether lending is carried out directly, in partnership with a registered NBFC, or through an intermediary structure. If the company proposes to undertake lending activities, then such activities are regulated by the Reserve Bank of India (RBI) and is required to obtain registration with RBI prior to undertaking any such lending activities. In addition to the banks, NBFCs, establish as a loan company is permitted to undertake lending activities. The NBFC is required to obtain a Certificate of Registration (CoR) as a Non-Banking Financial Company (NBFC) under either of the applicable category, i.e. NBFC-ICC or NBFC-P2P. In additions, a NBFC is required to satisfy eligibility requirement and conditions, such as meeting the prescribed Net Owned Fund (NOF) (currently ₹10 crore for most new NBFC entrants) criteria. Given the evolving regulatory landscape for fintech and digital lending in India, a detailed assessment of your proposed structure would be required to determine the applicable licensing and compliance obligations. We would be happy to assist with this assignment and advise connecting over a brief Teams call to discuss your proposed business model and the applicable regulatory considerations in further detail. Please note that the above is a preliminary overview and should not be construed as a legal opinion. A comprehensive analysis would follow once we have clarity on your operational model and structure.