Starting a financial business in India is a big step, especially when you want to lend money, issue wallets, or manage financial data. For such activities, you need NBFC registration in India. But a common question asked by many entrepreneurs is — "When is the right time to apply for NBFC registration?"
In this blog, we will help you understand the best time to apply for NBFC registration and why timing plays a major role in success. We will also cover key licenses like the RBI aggregator license, P2P lending license in India, and PPI license in India, which fall under the NBFC ecosystem.
What is NBFC Registration?
NBFC (Non-Banking Financial Company) is a type of company that provides financial services similar to banks but without holding a banking license. These services include:
- Lending money
- Asset financing
- Investment in shares, bonds, and other securities
- Issuing prepaid wallets
- Peer-to-peer (P2P) lending
- Account aggregation
To carry out any of these services legally in India, a company must first register as an NBFC with the Reserve Bank of India (RBI).
Why Does Timing Matter?
Starting too early without planning may lead to compliance errors. Starting too late may cause you to miss good business opportunities or face penalties if you start operations without approval. So, finding the right time is very important.
Here are a few factors to help you decide the right time for NBFC registration in India.
- When You Have a Clear Business Model
Before applying for NBFC registration, make sure your business model is ready. For example:
- Are you starting a lending platform?
- Do you want to offer digital wallets?
- Are you planning to become a financial data aggregator?
Your business model should clearly explain what services you will offer, how you will generate income, and how you will manage risks. Based on this model, you can also choose the right NBFC license — like P2P lending license, PPI license, or RBI aggregator license.
- When You Have the Required Capital
RBI has set minimum capital requirements for different types of NBFCs. For example:
- NBFC (Loan Company or Investment Company): ₹2 crore minimum capital
- NBFC (Microfinance Company): ₹5 crore (₹2 crore for Northeastern states)
- Account Aggregator NBFC: ₹2 crore
- PPI License Holder: ₹5 crore
- P2P Lending NBFC: ₹2 crore
So, the right time to apply is when you have arranged the required capital, either through self-funding or investors.
- When You Have a Qualified Team
RBI looks at the professional background of the directors and key persons. If your team has experience in finance, banking, or related fields, your chances of approval go up.
It is advisable to apply when your board of directors and management team are ready and meet RBI’s "fit and proper" criteria.
- When Your Infrastructure is Ready
For some licenses like P2P lending or RBI aggregator license, you need to have the technical setup in place — like a secure digital platform, servers, data protection policies, and IT systems.
So, if your tech and compliance infrastructure is ready, it's a good time to move forward with registration.
- Before Launching Any Financial Service
Never start a financial activity that needs NBFC registration without proper approval from the RBI. Doing so is illegal and may lead to heavy fines, blacklisting, or even jail time.
If you plan to offer any of the following, apply for registration before you launch:
- Lending services
- Buy Now Pay Later (BNPL) platforms
- P2P lending platform
- Digital wallets or prepaid cards (PPI)
- Data aggregation and sharing service
- When Market Demand is Growing
If your research shows that there is strong market demand for a specific service — like digital wallets or P2P lending — then it’s the right time to get into the market legally by getting the right license.
For example:
- A PPI license in India is great if you want to build a digital wallet or payment system.
- RBI aggregator license is required if you want to become a financial data-sharing platform.
- P2P lending license in India is perfect for connecting borrowers and lenders through a platform.
Entering the market when demand is high gives your business a better chance of growth.
- When You Want to Raise Funding
Investors always prefer working with registered and compliant companies. If you are planning to raise funds from VCs or angel investors, NBFC registration adds credibility and trust.
So, the right time to apply is before you start your funding rounds.
Popular NBFC Licenses You Should Know
Here are some NBFC licenses that are becoming popular in India:
✅ P2P Lending License in India
This license allows you to start a platform that connects individual lenders with borrowers. It’s suitable for fintech startups that want to offer micro-loans or short-term personal loans.
✅ PPI License in India
The Prepaid Payment Instruments (PPI) license is needed to offer digital wallets or prepaid cards. This is useful if your business involves online payments, cashback cards, or stored-value wallets.
✅ RBI Aggregator License
This license allows you to collect and share customer financial data with their consent. It’s essential for startups building apps for wealth management, credit scoring, or personal finance tracking.
Conclusion
The right time to apply for NBFC registration in India is when:
- You have a solid business model
- You have the required capital
- Your team is qualified
- Your infrastructure is ready
- You are about to launch services
- You see market demand
- You want to raise investment
Starting early with proper planning can help you avoid legal trouble and build a strong foundation. Whether you are planning to launch a P2P lending app, digital wallet, or financial aggregator platform — getting the right NBFC license is the first step toward long-term success.
FAQs
Q1. What is the capital requirement for NBFC registration in India?
You need a minimum of ₹2 crore for most NBFCs. Some licenses like PPI and Microfinance may need ₹5 crore.
Q2. Can a startup apply for NBFC registration?
Yes, as long as it meets all the RBI guidelines like capital, infrastructure, and fit proper management.
Q3. Is it mandatory to take approval from RBI before starting P2P lending?
Yes, P2P lending is a regulated activity. You must obtain the P2P lending license from RBI before starting.
Q4. What is the difference between PPI license and NBFC license?
NBFC license allows lending and investment services, while PPI license is for issuing prepaid payment systems like wallets or cards.
Q5. What is an RBI aggregator license?
This license is required for Account Aggregators that collect and share user financial data with consent.
Author Profile
Atul Shukla is a fintech expert and legal advisor at Corpbiz, helping businesses secure licenses like NBFC registration, PPI license, P2P lending license, and RBI aggregator license. With years of experience in the compliance space, Atul helps startups grow legally and safely in India’s financial ecosystem.
