The Ministry of Corporate Affairs has recently forwarded a list of 34,754 companies which are registered under the Companies Act, 1956 and classified / categorised as “Non- Banking Financial Companies” (NBFCs) in the records of Ministry of Corporate Affairs and these companies may be carrying on Non-Banking Financial Institution (NBFI) activities without mandatory registration as required under Section 45IA of Reserve Bank of India (RBI) Act, 1934, as only 12,375 companies are registered with the Reserve Bank as NBFCs (as on February, 2013). Many of these companies are, however, not registered with the Reserve Bank as NBFC and RBI is ascertaining whether any of these companies are carrying out the business of an ‘NBFC’ as defined by it.

It has been decided by RBI, that as a one-time measure, the financials of all these 34,754 companies (other than those registered with RBI) will be examined to ascertain their eligibility or otherwise for registration with RBI. The main objective is to determine whether among these companies there are NBFCs that ought to have registered with the RBI for carrying on their NBFI activities.

This was stated by Shri Namo Narain Meena, MoS in the Ministry of Finance in written reply to a question in the Rajya Sabha.

NBFC registration compliance: regulator to scrutinise corporate financials to determine unregistered NBFC activities and require registration where applicable. A regulator will examine financial statements of companies classified in corporate records as non banking financial companies but not registered with the banking regulator to determine whether their activities meet the statutory criteria for NBFC status and therefore require mandatory registration under the banking statute, with the objective of identifying entities that ought to have registered.