Planning to Acquire an NBFC? Here’s What You Need to Know

12-Jul-2025

Planning to Acquire an NBFC? Here’s What You Need to Know

Acquiring a Non-Banking Financial Company (NBFC) can be a powerful growth strategy — giving you access to lending licenses, financial markets, and a wider customer base. However, even a small misstep in compliance or documentation can lead to delays, regulatory hurdles, or outright rejection by the RBI.

To ensure a smooth and compliant acquisition process, here’s a step-by-step guide to help you navigate it correctly:

✅ 1. Sign a Memorandum of Understanding (MoU)

Start by clearly outlining the terms and conditions of the deal. The MoU defines the roles, responsibilities, and timelines for both parties, ensuring alignment from the start.

✅ 2. Conduct Comprehensive Due Diligence

Thoroughly review the NBFC’s financial records, regulatory compliance status, legal history, and operational risks. Identifying red flags early protects your investment and avoids future liabilities.

✅ 3. Valuation and Asset Review

Engage a Chartered Accountant to perform a fair valuation and certify the asset position of the NBFC. This valuation plays a crucial role in price negotiations and RBI documentation.

✅ 4. Execute the Share Transfer Agreement (STA)

Formalize the transfer of ownership through a legally binding STA. This agreement details the transaction structure, payment terms, and post-acquisition responsibilities.

✅ 5. Obtain RBI Approval

Apply for the Reserve Bank of India’s approval for the ownership and management change. Be prepared to respond to RBI queries and provide all necessary documentation promptly.

✅ 6. Issue Public Notice

As per RBI norms, a 30-day public notice must be published in two newspapers (one English and one vernacular) to notify stakeholders of the proposed change in ownership.

✅ 7. Complete MCA Filings

File the necessary forms with the Ministry of Corporate Affairs (MCA) to officially record changes in directors and shareholding structure.

✅ 8. Final Settlement and Handover

Complete the final asset transfer and settle all pending liabilities to successfully close the transaction and take control of the NBFC.

⚠️ Why Precision Matters

The NBFC acquisition process is compliance-heavy. Missing a single step or providing inaccurate information can cost you time, money, and credibility. Proper planning and professional guidance are essential.

✅ Need a Smooth and Compliant NBFC Acquisition?

Let our experts guide you through every stage — from deal structuring to RBI approval.
📞 Book a FREE consultation: +91 93113 47006

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