• Another One
  • Team

    • Minimum Net Owned Fund Requirement for NBFC Registration

    February 10, 2026 - Atul Shukla
    Minimum Net Owned Fund Requirement for NBFC Registration

     

    Starting a Non-Banking Financial Company (NBFC) in India is a great business opportunity, especially with the growing demand for digital lending, payments, and financial services. However, before applying for NBFC License Online, one of the most important conditions you must meet is the Minimum Net Owned Fund (NOF) requirement.

    Many entrepreneurs get confused about what Net Owned Fund means, how much money is required, and why the Reserve Bank of India (RBI) gives so much importance to it. This blog explains everything in simple words, so even first-time founders can understand it clearly.

    At Corpbiz, we help startups, fintech companies, and investors meet RBI requirements smoothly and obtain NBFC registration without unnecessary delays.

    What Is Net Owned Fund (NOF)?

    Net Owned Fund (NOF) is the real financial strength of an NBFC. It shows how much of the company’s own money is available to run the business and absorb losses, if any.

    In simple terms, NOF is the money owned by the company, not borrowed from others.

    Net Owned Fund Includes:

    • Paid-up equity share capital

    • Free reserves (retained earnings)

    • Balance after deducting losses

    Net Owned Fund Excludes:

    • Revaluation reserves

    • Deferred revenue expenditure

    • Intangible assets (like goodwill)

    • Investments in shares of other NBFCs

    The RBI checks NOF carefully to ensure the NBFC is financially stable and trustworthy.

    Why Does RBI Require a Minimum Net Owned Fund?

    The RBI regulates NBFCs to protect customers and maintain financial stability. The Minimum Net Owned Fund requirement exists to:

    • Ensure the NBFC can handle financial risks

    • Protect depositors and borrowers

    • Prevent weak or shell companies from entering the financial system

    • Promote responsible lending practices

    Without adequate NOF, an NBFC may fail during market fluctuations, which can harm customers and the economy.

    Minimum Net Owned Fund Requirement for NBFC Registration

    1. Standard NBFC (Non-Deposit Taking)

    For most NBFCs applying for NBFC License Online, the minimum NOF required is:

    ₹2 Crore

    This amount must be:

    • Fully paid-up

    • Available before filing the application

    • Reflected clearly in the company’s bank account

    This rule applies to:

    • Loan companies

    • Investment companies

    • Asset finance companies

    2. NBFC – Account Aggregator (NBFC-AA)

    If you plan to apply for an NBFC Account Aggregator License, the minimum Net Owned Fund required is:

    ₹2 Crore

    Account Aggregators do not lend money. Instead, they:

    • Collect financial data (with user consent)

    • Share it securely with banks and financial institutions

    Even though the business model is different, RBI still insists on strong capital backing.

    3. NBFC – Peer to Peer Lending (NBFC-P2P)

    For fintech startups planning to offer digital lending platforms, the P2P Lending License Online requires:

    ₹2 Crore as Net Owned Fund

    P2P platforms connect:

    • Individual lenders

    • Individual borrowers

    Since public money is involved, RBI closely monitors capital strength.

    4. NBFC – Payment Aggregator / Prepaid Payment Instruments (PPI)

    If your business involves wallets, prepaid cards, or digital payment instruments, you may need a PPI License Online.

    For PPI issuers:

    • Minimum net worth requirement is ₹5 Crore initially

    • To be increased to ₹15 Crore within 3 years

    This higher requirement ensures:

    • Security of customer funds

    • Smooth settlement of transactions

    How to Calculate Net Owned Fund Correctly?

    Many NBFC applications are rejected due to incorrect NOF calculation. Here’s a simple formula:

    Net Owned Fund =
     Paid-up Equity Capital

    • Free Reserves
       – Accumulated Losses
       – Intangible Assets
       – Investments in other NBFCs

    At Corpbiz, our experts calculate NOF exactly as per RBI guidelines to avoid rejection.

    Important RBI Conditions Related to NOF

    Before applying for NBFC License Online, keep these points in mind:

    • NOF must be maintained at all times

    • Funds must come from legal and disclosed sources

    • RBI verifies bank statements and CA certificates

    • Sudden cash deposits without explanation may lead to rejection

    • Promoters’ background and financial credibility are checked

    Can Net Owned Fund Be in the Form of Loans?

    No. Net Owned Fund cannot include borrowed money.

    The funds must be:

    • Promoter’s own contribution

    • Share capital or reserves

    • Fully traceable

    Using loans, unsecured credits, or temporary funds can lead to application rejection or cancellation of approval.

    Common Mistakes Made by NBFC Applicants

    Many applicants fail to get approval due to avoidable mistakes, such as:

    • Showing borrowed funds as NOF

    • Investing NOF in other NBFCs

    • Not maintaining minimum NOF after registration

    • Submitting incorrect CA certificates

    • Ignoring RBI compliance after approval

    With Corpbiz, these risks are minimized through expert guidance.

    Documents Required to Prove Net Owned Fund

    To prove NOF, the following documents are required:

    • Certificate from Chartered Accountant

    • Latest audited balance sheet

    • Bank statements showing fund availability

    • Shareholding pattern

    • Board resolution

    Proper documentation increases approval chances significantly.

    How Corpbiz Helps in NBFC Registration

    At Corpbiz, we provide end-to-end NBFC registration support, including:

    • NOF planning and structuring

    • Company incorporation

    • RBI application filing

    • Drafting business plan and policies

    • Liaison with RBI authorities

    • Post-registration compliance support

    Whether you want an NBFC License Online, P2P Lending License Online, PPI License Online, or NBFC Account Aggregator License, our experts ensure smooth approval.

    FAQs on Minimum Net Owned Fund for NBFC

    1. What is the minimum Net Owned Fund for NBFC registration?

    The minimum Net Owned Fund required is ₹2 Crore for most NBFC categories as per RBI guidelines.

    2. Can I apply for NBFC License Online without ₹2 Crore?

    No. RBI does not accept NBFC applications without meeting the minimum NOF requirement.

    3. Is NOF required to be maintained after registration?

    Yes. The NBFC must maintain the required Net Owned Fund at all times.

    4. What is the NOF requirement for P2P Lending License Online?

    For NBFC-P2P, the minimum Net Owned Fund is ₹2 Crore.

    5. What is the capital requirement for PPI License Online?

    PPI issuers must have ₹5 Crore initially, increasing to ₹15 Crore within 3 years.

    6. Is NBFC Account Aggregator License capital-intensive?

    The minimum NOF for NBFC Account Aggregator License is ₹2 Crore, which is moderate compared to other financial licenses.

    7. Can Corpbiz help with NOF planning?

    Yes. Corpbiz provides expert assistance in fund structuring, documentation, and RBI compliance.

    Conclusion

    The Minimum Net Owned Fund requirement is the foundation of NBFC registration in India. It reflects the financial strength, seriousness, and credibility of the business. Without meeting this requirement properly, even the best business idea can fail at the approval stage.

    If you are planning to apply for NBFC License Online, PPI License Online, P2P Lending License Online, or NBFC Account Aggregator License, professional guidance can save time, money, and effort.

    Corpbiz is your trusted partner for hassle-free NBFC registration and RBI approvals.

    Made with