How to Successfully Acquire an NBFC: A Complete Roadmap

How to Successfully Acquire an NBFC: A Complete Roadmap

Non-Banking Financial Companies (NBFCs) play a vital role in India's financial sector. Instead of starting a new NBFC from scratch, acquiring an existing one can be a faster and more effective option. However, the process involves several regulatory approvals, including NBFC license registration with RBI. 

In this blog, we will walk you through the complete roadmap to acquiring an NBFC successfully.

Step 1: Understand the Benefits of NBFC Takeover

Acquiring an existing NBFC offers multiple benefits, such as:

• Faster Market Entry – Avoid the long process of obtaining a new NBFC license registration with RBI.

• Established Business Model – The acquired NBFC may already have a customer base, financial records, and compliance history.

• Easier Regulatory Approval – The RBI approval process for takeover is often simpler than registering a new NBFC.

Step 2: Choose the Right NBFC

Before proceeding, ensure you choose an NBFC that aligns with your business goals. Factors to consider include:

• Type of NBFC – Loan companies, investment firms, or NBFC account aggregators.

• Financial Health – Check balance sheets, profitability, and asset quality.

• Compliance Status – Ensure the NBFC follows RBI regulations.

Step 3: Conduct Due Diligence

Due diligence is crucial to avoid legal and financial risks. This includes:

• Reviewing Financial Statements – Analyze the company’s financial history.

• Checking for Outstanding Liabilities – Ensure no hidden debts or pending litigations.

• Verifying Compliance Records – Check previous RBI audits and adherence to norms.

Step 4: Follow the NBFC Takeover Procedure as per RBI Guidelines

The NBFC takeover procedure RBI requires:

1. Board Approval – The acquiring company must pass a resolution for takeover.

2. Share Purchase Agreement (SPA) – An agreement is signed between the buyer and seller.

3. Public Notice – A public announcement must be made in two newspapers.

4. RBI Approval – An application must be submitted to the RBI for final approval.

5. Completion of Takeover – After RBI approval, shares are transferred, and control is established.

Step 5: Apply for Additional Licenses If Needed

After acquiring an NBFC, you may want to expand its services by applying for additional licenses such as:

• NBFC Account Aggregator License Online – To collect and share financial data between banks and financial institutions.

• Apply PPI License – To issue prepaid payment instruments like wallets and smart cards.

• Apply P2P License – To operate a peer-to-peer lending platform.

Step 6: Ensure Smooth Transition and Compliance

Once the takeover is complete:

• Update Company Records – Change the ownership details in RBI and ROC records.

• Maintain Regulatory Compliance – Follow RBI guidelines to avoid penalties.

• Strengthen Business Operations – Improve customer service, digital platforms, and loan disbursement processes.

Conclusion

Acquiring an NBFC is a strategic decision that can provide a head start in the financial sector. However, it requires careful planning, proper due diligence, and adherence to RBI regulations. Whether you are looking for NBFC license registration with RBI, NBFC account aggregator license online, or applying for PPI and P2P licenses, following this roadmap will help you complete a successful takeover. If you need expert assistance, consult professionals who specialize in NBFC acquisitions.