Industry Focus
NBFC & Fintech
Navigating India's complex financial regulatory landscape
NBFCs and fintech companies operate under one of India's most heavily scrutinised regulatory frameworks. RBI oversight is intensive, enforcement is swift, and the regulatory landscape changes frequently. Corpus Juris Legal is the trusted legal partner for NBFC and fintech companies in Delhi NCR.
The Legal Landscape
Non-Banking Financial Companies and fintech companies are among the most heavily regulated entities in India's financial system. The RBI's oversight of NBFCs spans capital adequacy requirements, prudential norms, asset classification, fair practices code compliance, and — for larger entities — intensive supervisory engagement. Digital lending guidelines issued by the RBI in 2022 significantly restructured how NBFCs can originate loans through digital platforms, imposing disclosure requirements, cooling-off periods, and LSP accountability obligations that require comprehensive compliance redesign.
Co-lending arrangements — structured between banks and NBFCs under the RBI's co-lending model — are one of the sector's most commercially significant legal developments. The documentation, servicer obligations, risk-sharing mechanics, and FLDG structures involved in co-lending require legal architecture that balances both parties' regulatory obligations while delivering commercial efficiency. Corpus Juris Legal has structured multiple co-lending arrangements and advises both the bank and NBFC parties.
Fundraising for NBFCs and fintechs involves navigating both FEMA's FDI regulations and SEBI's rules on listed NCDs and securitisation instruments. For venture-backed fintechs, SHA negotiations must account for RBI's fit-and-proper criteria for directors and shareholders — a dimension that standard startup financing lawyers often miss. Cybersecurity compliance under RBI's IT framework and customer data obligations under DPDP Act add two further compliance dimensions. Corpus Juris Legal's NBFC and fintech practice covers the complete regulatory and transactional spectrum.
Key Legal Challenges in the NBFC & Fintech Sector
- ◆RBI regulatory compliance and inspections
- ◆Digital lending guidelines compliance
- ◆Co-lending arrangement structuring
- ◆Cybersecurity and data compliance
- ◆Fundraising and investment structuring
How Corpus Juris Legal Helps NBFC & Fintech Companies
Regulatory Framework
- ◆RBI Act 1934 (Chapter IIIB — NBFCs)
- ◆RBI Scale Based Regulation Framework (October 2022)
- ◆RBI Master Direction on Digital Lending (September 2022)
- ◆RBI Master Direction on Co-Lending Model
- ◆RBI Master Direction — Non-Banking Financial Company Returns
- ◆FEMA 1999 (FDI in NBFCs under automatic route)
- ◆Payment and Settlement Systems Act 2007 (payment aggregators)
- ◆Digital Personal Data Protection Act 2023
- ◆Companies Act 2013 (NBFC corporate governance)
- ◆SEBI regulations (NCD issuance, securitisation)
Frequently Asked Legal Questions
What are the key compliance requirements under RBI's Scale Based Regulation for NBFCs?
The Scale Based Regulation framework classifies NBFCs into four layers — Base, Middle, Upper, and Top — with progressively stringent requirements. Upper Layer NBFCs face enhanced governance requirements including mandatory independent compliance function, listing within three years, board composition requirements, and enhanced capital adequacy (Common Equity Tier 1 of 9%). All layers must comply with revised concentration norms, related party transaction limits, and the fair practices code. The framework significantly enhanced corporate governance expectations for mid-to-large NBFCs effective October 2022.
How should co-lending arrangements be structured to comply with RBI guidelines?
Co-lending arrangements under the CLM framework require a board-approved policy, a master agreement between the bank and NBFC specifying lending parameters, the bank taking minimum 20% of the loan on its books, borrower consent and disclosure of both lenders, segregated servicing obligations, and clear default management procedures. FLDG arrangements within the 5% cap must be documented with trigger events, invocation mechanics, and replenishment obligations. The NBFC's prior experience in the lending segment and the credit assessment framework must be documented in the master agreement.
What RBI fit-and-proper requirements affect NBFC shareholder and board composition?
RBI's fit-and-proper criteria require directors and significant shareholders of NBFCs to satisfy integrity, financial soundness, and competence requirements. Any acquisition of 26% or more shareholding in an NBFC requires prior RBI approval. Changes in directors must be reported to RBI within 15 days. SHA provisions in venture capital financing — including investor board nomination rights, reserved matters, and change of control triggers — must be structured consistently with these RBI requirements. Failure to maintain fit-and-proper compliance can result in RBI directing removal of directors or rejection of ownership changes.
What are the digital lending compliance requirements for NBFCs?
NBFCs must ensure all loan disbursements and repayments flow directly to and from the borrower's bank account without LSP pass-through. A Key Fact Statement disclosing APR, fees, recovery mechanisms, and grievance officer details must be provided to borrowers before loan execution. FLDG arrangements are permitted within a 5% cap with specific documentation requirements. A cooling-off period must be offered to digital loan borrowers. All LSPs must be disclosed on the NBFC's website. Data collected by LSPs must be consent-based, purpose-limited, and the NBFC remains responsible for LSP conduct.
What to Expect When You Instruct Us
Every new NBFC & Fintech engagement begins with a dedicated briefing — not a generic intake call. We invest time understanding the specific regulatory environment your business operates in, the commercial constraints that shape your legal decisions, and the risk appetite that should inform our advice.
Your matter is assigned to a partner with specific experience in NBFC & Fintech sector legal requirements. The same partner who takes your briefing is the one who signs off on your advice notes, appears at your regulatory meetings, and is accountable for outcomes. Partner-level attention is not reserved for the largest mandates — it is the standard at Corpus Juris Legal.
We maintain ongoing sector intelligence for the NBFC & Fintech sector — monitoring regulatory updates, enforcement trends, and policy developments that affect your legal exposure. Our retainer clients receive proactive alerts when changes are relevant to their operations, not reactive advice after the fact.
Sector Advisory
Talk to Our NBFC & Fintech Legal Team
Our NBFC & Fintech sector practice is led by a partner with hands-on experience in your industry's regulatory environment. First conversation is substantive — not a sales call.
Schedule a ConsultationWhatsApp Our CounselServices in This Sector
- ◆NBFC Regulatory Compliance
- ◆Fintech & Payments Regulation
- ◆DPDP Act Compliance
- ◆M&A Advisory
- ◆Private Equity Advisory
Ready to Discuss Your NBFC & Fintech Legal Matter?
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