What NBFC means
NBFC stands for non-banking financial company. It is a company that gives loans or other financial services and is registered with RBI (the Reserve Bank of India), but it is not a bank. Gold loans, two-wheeler loans, small personal loans and microfinance loans often come from NBFCs.
The main difference from a bank is on the savings side. NBFCs can’t open a savings or current account for you, and they don’t issue cheque books. But when you borrow from a registered NBFC, many of the same RBI customer rules apply as at a bank.
Rules that also cover NBFCs
- KFS before you sign. For retail term loans, an NBFC must give you a Key Facts Statement (a short sheet with the APR, all fees and the total you repay). Charges not listed in it can’t be added later without your clear consent.
- No prepayment charge on floating-rate loans taken by individuals for non-business use, for loans sanctioned or renewed from 1 January 2026.
- Digital loans. The app must name the lender, money must move straight between you and the lender, and there is a cooling-off period (a window to exit the loan) of at least 1 day.
- Complaints. If an NBFC does not resolve your complaint, you can go to the RBI Ombudsman.
You may also see “NBFC-MFI”. This is an NBFC that does mostly microfinance. RBI’s rule since June 2025 is that at least 60% of its assets must be microfinance loans, so it may lend for other things too.
Checking an NBFC: a real-life example
Imran, 29, sees a loan app offering ₹50,000. The app has a short brand name. In its “Lending partners” page and in the KFS he finds the actual lender: let’s call it “ABC Finance Private Limited”.
- He opens RBI’s NBFC page, rbi.org.in/Scripts/BS_NBFCList.aspx. It has a list of registered NBFCs and a separate list of NBFCs whose registration was cancelled.
- He downloads the registered list and searches for the exact legal name. He also checks that it is not on the cancelled list.
- He goes to rbi.org.in → Citizen’s Corner → “DLAs deployed by REs” and searches for the app name. That list is RBI’s register of digital lending apps (DLAs), built from what lenders report. RBI says it does not check the list itself.
The lender is on the registered list and the app is on the DLA list. So the loan comes from a regulated company. That still says nothing about whether the loan is cheap or right for Imran. He compares the APR in the KFS next.
Fictional names. “ABC Finance” stands in for any lender.
Our guide How to check a lender or loan app has the full checklist and the red flags.
Where you see the term
You’ll see “NBFC” in the KFS, the loan agreement and the sanction letter (the letter confirming your loan), often next to an RBI registration number. Apps that work for a lender may call themselves an LSP (lending service provider, an agent that runs the app for a bank or NBFC). See LSP.
Common mistakes
- Taking the app name for the lender. The app and the lender are often different companies.
- Thinking “registered” means “recommended”. RBI registration tells you who regulates the lender. It isn’t a rating.
- Trusting a certificate image sent on WhatsApp. Check RBI’s own list yourself.
- Paying a fee before the loan is paid out. A real lender takes fees from the loan or as shown in the KFS, not as a “release charge” to a personal UPI ID.
What to check
- The lender’s full legal name, from the KFS or agreement.
- That name on RBI’s registered NBFC list, and not on the cancelled list.
- The app on RBI’s DLA list, if you’re borrowing through an app.
- The APR and total repayable in the KFS, before you accept.