Report on the NBFC Sector | Regulatory Compliance for NBFC Industry in India | Simplifying Compliance management for the Non -Banking Financial Companies in India

Report

Non-Banking Financial Companies (NBFCs) have become key players in India’s credit landscape, often serving segments beyond the reach of traditional banks. However, their growing scale and systemic relevance have brought with them an increasingly complex web of compliance obligations. From one-time approvals to hundreds of ongoing filings, audits, disclosures, and record-keeping tasks, NBFCs must navigate a challenging regulatory environment.

This report explores the wide range of compliance requirements impacting NBFCs across categories such as Labour, EHS, Finance, Corporate Laws, and sector-specific mandates. It sheds light on the impact of the RBI’s Scale-Based Regulatory framework, new Prompt Corrective Action norms, and the challenges of managing over 600 compliances in a single state — compounded by the absence of a centralised update system.

Drawing from industry surveys and regulatory analysis, the report presents a clear picture of the operational and strategic challenges that compliance officers and NBFC leadership face. It also highlights the need for a more streamlined, technology-enabled approach to compliance, backed by better awareness, internal processes, and regulatory intelligence.

Case Study

Our client is a debt listed finance company and registered NBFC under National Housing Bank (NHB). The company has 352 branches across 25 States in India with over 1,300 employees.

Our client had a complex business environment with geographically dispersed operations. Keeping a tight control over applicability of various Acts and status of key compliances was challenging on a day to day basis. In addition, RBI & NHB would issue several notifications and circulars several times in a year resulting in changes to compliances. Our client was managing their compliances using spreadsheets, emails and paper folders.

Some of the key challenges faced as given below:

Lack of confidence in the list of applicable Acts and Compliances. No baseline review and gap analysis had been done for years
Highly distributed compliance environment with no central visibility and control
Penalties on account of delayed Filings due to human errors
Highly manual and time intensive search for applicable Legal Updates
Lack of clarity on State Rules and State Wise applicable Compliances
Highly manual and spreadsheet system for tracking the status of various compliances
Lack of clarity on industry specific compliances including ALM, NBS and Branch Info Returns
Several statutory notices on account of missed compliances
Business risks arising out of missed license renewals
Irregular tracking of vendor and supplier agreements leading to financial implications

Our client needed a compliance automation solution which could help them bring greater control over applicability, legal updates and real time status tracking.

TeamLease Regtech Engagement

TeamLease Regtech engaged with the client in the first quarter of 2017. A team of 3 SMEs visited their South India based head office for a period of 1 week to conduct a thorough review of their business operations across India.

The implementation of RegTrack was initiated in June, 2017 and completed on August, 2017.

Client Facts

Part of a Large Indian Corporate Group
Debt listed Company
352 branches across 25 States
1,400+ employees

Project Highlights

68 Applicable Acts (18 RBI, 11 NHB)
Over 5,000 compliances
128 users
8 Weeks to go live

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Phase 1 - Business Discovery

This phase of the project focussed on understanding their business to establish the applicability of Acts and Compliances. Comprehensive information was collected via in-person interviews / meetings / discussions with the Board & Management, individual department heads, and other representatives in the company. The following items were collated:

Business Set up (Group, Entities, Locations, number and nature of establishments, Client, Industry)
Products (Housing Finance)

Phase 2 - Compliance Applicability Assessment

TeamLease Regtech identified client business, entities, locations, products etc. and develop a list of Acts and compliances applicable to their business. The client work with 352 Operational branches in 25 States.

The team identified over 68 applicable Acts including 18 master directions and circulars under RBI. There were an additional 11 regulations under NHB. In all there were over 4,280 applicable compliances including time based and on-going compliances.

In addition, there were over 60 event based compliances mapped under Secretarial Category. These added approximately 1,020 compliances.

Phase 3 - Implementation

TeamLease Regtech assigned a 2 member team to work with the client. The client was keen to implement the product in phases. Our team worked collaboratively with the client and developed an implementation plan spread over 2 months. The plan included physical visits to key branch offices. Here are the key activities undertaken during the implementation phase:

Map the Client Organisation (Entities, Sub-Entities, Branches, Locations, Departments)
Review of identified applicable Acts and Compliances with respective department heads
Discuss identified gaps with department heads and compliance head
Map Compliances to specific users based on their roles
Hands on training sessions with user groups based on their locations and roles
Activation of system for a predetermined go-live date
A total of 128 users were mapped and trained over a period of 6 weeks for Performer, Reviewer, Approver and Management Roles

In Conclusion

Our client is a leading NBFC in India with a large national footprint. TeamLease Regtech completed end to end implementation of such a complex NBFC in 8 weeks. Now, the Compliance officer has much greater control over their organisation’s compliance. The level of awareness and sensitivity to statutory liabilities across the organisation has improved dramatically. He is able to identify risks and issues in real time and plan necessary interventions. The management now reviews the Management Dashboard in RegTrack during every board meeting. There is greater visibility, transparency and accountability in the system. The cost of poor compliances arising out of delays and missed compliances reduced by 90% in the first year.