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Purchase and Sale of NBFC in India: Complete Legal, RBI & Compliance Guide

  • 23-Feb-2026
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Purchase and Sale of NBFC in India: Complete Legal, RBI & Compliance Guide

The purchase and sale of a Non-Banking Financial Company (NBFC) in India has become a popular route for investors, financial institutions, and FinTech players to enter or expand in the financial services sector. Instead of applying for a fresh NBFC license—which is time-consuming and uncertain—acquiring an existing NBFC offers speed, continuity, and regulatory certainty, provided the transaction is structured correctly.

However, NBFC acquisition or sale is a highly regulated transaction requiring strict compliance with RBI regulations, FEMA guidelines, and Companies Act provisions. Any lapse can result in rejection, penalties, or cancellation of approval.

Why Buy an Existing NBFC?

Purchasing an existing NBFC offers multiple strategic advantages:

  • Immediate entry into regulated financial services

  • Existing RBI registration and compliance framework

  • Faster business launch compared to new NBFC registration

  • Access to ready corporate structure and historical track record

  • Ideal for FinTechs, PE/VC funds, and foreign investors

  • Easier scaling and fundraising

For many investors, NBFC acquisition is the fastest route to market.

Why Do Promoters Sell an NBFC?

NBFC promoters may consider selling due to:

  • Strategic exit or business restructuring

  • Capital constraints or regulatory pressure

  • Shift in business focus

  • Inability to meet RBI capital or compliance norms

  • Attractive valuation and exit opportunity

Selling an NBFC allows promoters to unlock value from a regulated asset.

Key RBI Regulations for Purchase and Sale of NBFC

The Reserve Bank of India closely monitors NBFC ownership changes. Key regulatory requirements include:

  • Prior RBI approval for change in control or management

  • Mandatory approval for acquisition of 26% or more shareholding

  • Approval required for any change in directors resulting in control change

  • Fit & Proper assessment of incoming shareholders and directors

  • Disclosure of source of funds and financial background

  • Compliance with minimum net owned fund (NOF) requirements

⚠️ Without RBI approval, the transaction is invalid—regardless of private agreements.

Step-by-Step Process for Buying or Selling an NBFC

1. Preliminary Assessment

  • Identify NBFC type (ICC, NBFC-IFC, NBFC-MFI, etc.)

  • Check RBI registration status and compliance history

  • Confirm capital adequacy and NOF position

2. Due Diligence

  • Legal, financial, regulatory, and compliance review

  • Past RBI inspection observations

  • Loan book quality, litigation, and statutory filings

3. Transaction Structuring

  • Share purchase vs share subscription

  • Control and management restructuring

  • Valuation as per RBI norms

4. RBI Approval Application

  • Submission of change in control application

  • Promoter background, net worth, and source of funds

  • Proposed business plan and governance framework

5. Execution & Closing

  • Share transfer / allotment

  • Board and management changes

  • Post-closing regulatory filings

Foreign Investment in NBFC Purchase or Sale

Foreign buyers must comply with:

  • FDI policy (100% allowed under automatic route for NBFCs)

  • FEMA valuation norms

  • FC-GPR / FC-TRS filings

  • RBI approval for change in control

  • KYC and beneficial ownership disclosures

Foreign transactions face higher scrutiny, making professional advisory critical.

Common Risks in NBFC Sale & Purchase

  • RBI rejection due to poor compliance history

  • Undisclosed regulatory violations

  • Valuation disputes

  • Improper documentation

  • Delay in RBI approval

  • Post-acquisition compliance failures

A poorly structured transaction can destroy deal value.

How Our NBFC Purchase & Sale Advisory Helps

We provide end-to-end NBFC acquisition and exit support, including:

✔ Identification of buyer/seller-ready NBFCs
✔ Legal, financial & RBI compliance due diligence
✔ Transaction structuring and valuation coordination
✔ Preparation and filing of RBI approval applications
✔ FEMA & Companies Act compliance
✔ Drafting share purchase agreements and board resolutions
✔ Post-transaction compliance & governance setup

We ensure speed, compliance, and deal certainty.

Who Should Use NBFC Purchase & Sale Advisory?

  • Investors acquiring NBFC licenses

  • FinTech companies entering lending

  • PE / VC funds seeking regulated platforms

  • Foreign investors buying Indian NBFCs

  • Promoters planning NBFC exit

  • Strategic buyers expanding portfolios

Why Professional Advisory Is Essential

✔ Faster RBI approvals
✔ Reduced regulatory risk
✔ Clean transaction execution
✔ Transparent valuations
✔ Strong post-acquisition compliance
✔ Protection for both buyer and seller

Planning to Buy or Sell an NBFC in India?

NBFC transactions involve serious regulatory scrutiny. One mistake can delay or derail the entire deal. A compliance-first, RBI-aligned approach is the key to success.

📞 Contact us for a Free Consultation:
+91 93113 47006

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