#WednesdayInsights: Navigating Through The NBFC Compliance Filings & Returns

Introduction

Compliance filings are an essential part of the regulatory framework for Non-Banking Financial Companies (NBFCs) in India. This article provides an overview of the various types of NBFC compliance filings, including Credit Information Companies (CIC) Reporting, NESL Filings, FIU-IND Reporting, CERSAI Filings, CKYCR Filings, Various Returns, and XBRL Filings. Each filing type is explained, highlighting the due dates, procedures, and the significance of these filings in ensuring transparency, regulatory compliance, and the smooth functioning of NBFCs in the financial ecosystem.

Types of NBFC Compliance Filings

Credit Information Companies (CIC) Reporting

• Credit Information Companies (CICs), such as TransUnion CIBIL, Equifax, Experian, and CRIF High Mark, play a crucial role in the financial ecosystem by providing credit information to lenders. These CICs are regulated by the RBI’s Department of Banking Operations and Development. Under the Credit Information Companies (Regulations) Act of 2005 (CICRA), both banks and NBFCs are obligated to report retail loans taken by consumers to all four credit information bureaus. Read more
• Due Date: The reporting of credit information to CICs must be done on or before the 10th day of the subsequent month.

Sample CIR Report for CIBIL.

Application Form to get CIR Report for Experian.

Understand Experian CIR Report in detail.

NESL Filings

• All NBFCs are required to report their financial debt to the National E-Governance Services Limited (NESL). This reporting is necessary to maintain transparency and monitor the financial health of NBFCs.
• Due Date: NBFCs must submit their financial debt report to NESL no later than one week after the start of the following month.
• Procedure: To understand the complete procedure for reporting financial debt to NESL, you can refer to the provided guidelines. It will provide detailed information on the steps to follow and the required format for reporting.
• Report Generation: To generate the report, follow the instructions Read more

FIU-IND Reporting

• All regulated organizations are obligated to report specific transactions to the Financial Intelligence Unit – India (FIU-IND) agency, as specified in Rule 3 of the 2005 Prevention of Money Laundering Act (PMLA) Regulations.
• Due Date: The reporting of transactions must be completed within 15 days of the subsequent month. If an organization becomes convinced that a transaction is Read more

?CERSAI Filings

• When disbursing secured loans, it is important to initiate CERSAI filings to register the first change of the secured property as soon as possible. This registration is crucial for creating a legally recognized security interest over the collateral provided by the borrower.
• Due Date: The specific due date for completing the CERSAI filing may vary depending on the applicable regulations and internal policies of the lending institution. Read more

CKYCR Filings

• When disbursing loans or establishing an account relationship, it is mandatory for all regulated entities (REs), including NBFCs, to conduct Know Your Customer (KYC) verification. This process ensures that proper due diligence is carried out to verify the identity and address of the customer, mitigating the risk of financial fraud or illegal activities.
• Due Date: The completion of CKYCR filings must be done within ten days from the start date of the account relationship or loan disbursal. Read more

Various Returns

• DNBS 02: This return is filed quarterly by NBFCs that accept and hold deposits. It includes critical financial parameters and indicators. The NBFCs are required to file this return within 15 days of the end of each quarter. It provides important financial information to regulatory authorities.
• DNBS 10: The statutory auditor certificate (SAC) is an annual return filed by NBFCs. It should be filed within one month of finalizing the balance sheet. Read more

XBRL Filings

As of around 2020, the Reserve Bank of India (RBI) introduced a requirement for all NBFCs to submit their returns in XBRL (Extensible Business Reporting Language) format. This applies to both financial and non-financial institutions.

Non-financial institutions, including NBFCs, are obligated to submit various returns to the RBI related to deposits, prudential norms, compliance, and other regulatory requirements. The RBI mandated that all NBFCs must file these returns using the XBRL mode, starting from the financial year 2019-20. There are no exceptions to this requirement, and all NBFCs are expected to comply.

The specific types of returns that NBFCs are required to file in XBRL format include DNBS 02, DNBS 10, and DNBS 13. These returns cover critical financial parameters and indicators, statutory auditor certificates, and overseas investment details, respectively.

Conclusion

Adherence to NBFC compliance filings is crucial for the smooth functioning of Non-Banking Financial Companies and for maintaining transparency in the financial ecosystem. By fulfilling their reporting obligations, NBFCs contribute to the assessment of creditworthiness, monitor financial health, combat money laundering, and facilitate ease of doing business. Staying updated and compliant with these filings ensures a strong regulatory foundation and fosters trust among stakeholders in the NBFC sector.

Originally Published at CloudBankin.