Source: Business Standard
Context
The Reserve Bank of India (RBI) on Tuesday, 30 June 2026 revised the application form and indicative checklist for NBFCs (including HFCs) seeking voluntary surrender of their Certificate of Registration (CoR), following changes to the regulatory framework for Unregistered Type I NBFCs. The revised documents are hosted on the PRAVAAH portal — RBI’s single-window online application gateway launched 28 May 2024. The changes follow RBI’s Amendment Directions dated 29 April 2026 (the RBI (NBFC – Registration, Exemptions, and Framework for Scale Based Regulation) Amendment Directions, 2026), which introduced the “Unregistered Type I NBFCs” category — entities that do not accept public funds, have no customer interface, and have asset size below ₹1,000 crore — exempted from mandatory registration under Section 45-IA of the RBI Act, 1934. The transition window for existing NBFCs eligible for deregistration is 1 April – 30 September 2026.
What is a CoR (Certificate of Registration)?
- Statutory certification issued by RBI under Section 45-IA of RBI Act, 1934.
- Mandatory for any entity carrying on the business of a Non-Banking Financial Institution (NBFI).
- Confers regulatory recognition + supervision on the NBFC.
Why do NBFCs surrender CoR?
- Cease NBFC business operations.
- Convert to unregistered Core Investment Company (CIC).
- Amalgamation / merger with another entity.
- Now (post-April 2026): To become an Unregistered Type I NBFC — reducing compliance burden.
What is the new “Unregistered Type I NBFCs” category?
Introduced via the RBI (NBFC – Registration, Exemptions, and Framework for Scale Based Regulation) Amendment Directions, 2026 (dated 29 April 2026), following the parent Directions, 2025 notification of 28 November 2025.
| Criteria for Unregistered Type I NBFCs |
|---|
| No acceptance of public funds (direct or indirect) |
| No customer interface |
| Asset size < ₹1,000 crore |
- Effect: Exempt from mandatory RBI registration under Section 45-IA of RBI Act, 1934.
- Rationale: Reduce “regulatory cholesterol” for private family offices, captive treasuries, single-family investment vehicles.
- Aligns Indian regime with global proportionate regulation for non-systemic proprietary structures.
What are the transition requirements for existing NBFCs eligible for deregistration?
| Requirement | Detail |
|---|---|
| Application Mode | PRAVAAH portal only |
| Original CoR | Must be physically surrendered to RBI |
| Auditor Certification (SAC) | Confirming no public funds/customer interface for past 3 years |
| Financials | 3 years of audited balance sheets |
| Board Resolution | Disclosing status + confirming no intent to access public funds/customer interface + agreement to seek Type II NBFC registration if breached |
What is the PRAVAAH portal?
- Full Form: Platform for Regulatory Application, Validation and Authorisation.
- Launched: 28 May 2024 by then RBI Governor Shri Shaktikanta Das.
- Purpose: Single-window online application gateway for all RBI approvals, licences, and authorisations.
- Consolidates ~60+ types of RBI applications across regulatory departments.
- Reduces e-mail + paper filings; auto-tags to concerned regional office.
What are the categories under the revised NBFC regulatory framework (2025/2026)?
| Category | Public Funds | Customer Interface | Asset Size | RBI Registration |
|---|---|---|---|---|
| Unregistered Type I NBFC | No | No | < ₹1,000 crore | NOT required |
| Registered Type II NBFC | Yes/No | Yes | Various | Required |
| Systemically Important NBFC (NBFC-UL/ML/BL) | Yes | Yes | Threshold-based | Required + heightened supervision |
Statutory basis
- RBI Act, 1934 — Section 45-IA: Mandates CoR for NBFCs.
- RBI (NBFC – Registration, Exemptions, and Framework for Scale Based Regulation) Directions, 2025 (28 November 2025).
- RBI (NBFC – Registration, Exemptions, and Framework for Scale Based Regulation) Amendment Directions, 2026 (29 April 2026).
Practice MCQs
Q1. With reference to the RBI’s revised norms for voluntary surrender of Certificate of Registration (CoR) by NBFCs on 30 June 2026, consider the following statements:
- NBFCs and HFCs intending to surrender their CoR must submit the revised application form through the PRAVAAH portal.
- The changes follow the RBI’s amendment directions issued on 29 April 2026.
- PRAVAAH is RBI’s single-window online application gateway launched on 28 May 2024.
- Once an NBFC files a CoR surrender application on PRAVAAH, its NBFC status is automatically cancelled.
How many of the above statements are correct?
(a) Only one (b) Only two (c) Only three (d) All four (e) None
(Statement 4 is wrong; filing the application does NOT amount to automatic cancellation — the entity continues to be an NBFC/HFC until RBI issues a formal cancellation letter, and must continue complying with all regulations.)
Q2. With reference to the new “Unregistered Type I NBFCs” category, consider the following statements:
- Unregistered Type I NBFCs are entities that neither accept public funds nor have any customer interface, with asset size below ₹1,000 crore.
- They are exempted from mandatory registration under Section 45-IA of the RBI Act, 1934.
- The transition window for existing NBFCs to surrender their CoR and become Unregistered Type I is 1 April 2026 to 30 September 2026.
- Unregistered Type I NBFCs are permitted to accept unlimited public deposits without any restrictions.
How many of the above statements are correct?
(a) Only one (b) Only two (c) Only three (d) All four (e) None
(Statement 4 is wrong; Unregistered Type I NBFCs must NOT accept public funds — this is a core eligibility criterion.)
Answer Key
- (c) — Statement 4 wrong: No automatic cancellation on filing.
- (c) — Statement 4 wrong: Unregistered Type I cannot accept public funds.
