What are the Types of NBFCs in India Explained: ICC, MFI, P2P, Account Aggregators & More

The Non-Banking Financial Company (NBFC) sector in India has grown rapidly, offering innovative financial solutions to businesses and individuals. But not all NBFCs are the same — they differ in purpose, operations, and regulatory requirements.

Whether you're exploring the NBFC registration process, planning to invest, or simply curious, understanding the various types of NBFCs in India is essential. This guide explains the major NBFC categories like Investment and Credit Companies (ICC), Micro Finance Institutions (MFI), Peer-to-Peer (P2P) lenders, Account Aggregators (AA), and others, with insights on how to register an NBFC online.

What Is an NBFC?

An NBFC (Non-Banking Financial Company) is a financial institution registered under the Companies Act, 2013, engaged in the business of loans, advances, investments, and other financial services, but does not hold a banking license.

NBFCs are regulated by the Reserve Bank of India (RBI) and must comply with its guidelines regarding capital adequacy, risk management, and operations.

Key Features:

Cannot accept demand deposits like banks
Cannot issue cheques drawn on itself
Must follow RBI norms depending on the NBFC type

To start operations, companies must go through the NBFC registration process with the RBI.

Types of NBFCs in India

NBFCs are classified based on:

Their nature of activity
Whether they accept public deposits
Their systemic importance

Let’s break down the major types of NBFCs in India.

1. Investment and Credit Company (NBFC-ICC)

The Investment and Credit Company (ICC) is a consolidated structure introduced by RBI in 2019, merging the functions of three earlier types: Asset Finance Company (AFC), Loan Company, and Investment Company.

Functions:

Providing loans and advances
Investing in securities
Financing purchase of assets (vehicles, machinery, etc.)

Key Points:

Most common NBFC structure
Suitable for startups offering credit or investment services
Requires net owned funds (NOF) of ₹2 crore

ICC is a preferred choice for businesses going through NBFC registration online, especially in fintech lending and asset finance.

Also Read: What are the Documents Required for Recovery of Shares from IEPF

2. Micro Finance Institution (NBFC-MFI)

NBFC-MFIs provide microloans to underserved or low-income populations, especially in rural or semi-urban areas.

Criteria:

85% of total assets must be in the form of qualifying assets (small loans)
Loan amount per borrower should not exceed ₹1.25 lakh
Typically cater to borrowers with no access to traditional banking

Significance:

Key role in financial inclusion
Popular with social impact investors and NGOs

Those planning to apply for NBFC registration with a focus on rural credit and micro-lending often choose the MFI route.

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

An NBFC-P2P facilitates direct loans between borrowers and individual lenders through an online platform.

Features:

Acts as a tech-driven intermediary
Cannot lend or borrow on its own account
Maximum exposure per borrower or lender capped by RBI

RBI Guidelines:

Must be a company with minimum NOF of ₹2 crore
Strict data privacy and due diligence norms
Must maintain escrow accounts through a bank partner

Entrepreneurs entering the digital lending space must go through a special NBFC registration process to operate as a P2P platform.

Also Read: What are Types of Alternative Investment Funds in India

4. Account Aggregator (NBFC-AA)

A relatively new type of NBFC introduced by RBI, Account Aggregators (AA) enable individuals and businesses to share their financial data across banks, insurance, investments, etc., in a secure and consent-based manner.

Functions:

Collect financial information from banks, insurers, mutual funds
Share it with financial service providers (with user consent)
No lending or data storage allowed

Use Case:

Enables faster credit underwriting
Enhances financial transparency
Powers open banking in India

NBFC-AA is a great option for fintech startups involved in data-driven finance or open banking ecosystems.

5. Infrastructure Finance Company (NBFC-IFC)

NBFC-IFCs provide long-term funding to infrastructure projects in sectors like transportation, energy, water, and telecommunication.

Key Criteria:

Minimum NOF: ₹300 crore
Must have 75% of assets in infrastructure loans
Minimum credit rating of “A” or equivalent

Applicability:

Suited for large corporate groups or foreign investors focusing on infrastructure

6. Housing Finance Company (HFC)

Though technically separate from NBFCs and now regulated by National Housing Bank (NHB), HFCs offer home loans, loans against property, and housing project finance.

Requirements:

NOF of ₹10 crore (increased as per NHB guidelines)
Must register under NHB before starting operations

HFCs remain a strong sector given India’s housing demand and urbanization.

7. Core Investment Company (CIC)

A Core Investment Company (CIC) is a type of NBFC holding at least 90% of its total assets as investments in group companies.

Key Conditions:

At least 60% of net assets should be equity investments
Cannot trade or deal in securities (except for group companies)
Minimum capital: ₹100 crore

Ideal for business groups managing holdings across subsidiaries.

8. Mortgage Guarantee Companies & Others

These include:

Mortgage Guarantee Companies (specialized in guaranteeing home loans)
NBFC-Factors (provide invoice discounting/factoring services)
NBFC-NDs (Non-deposit taking, smaller in size)

Each type has its own niche and regulatory framework under RBI guidelines.

NBFC Registration Process in India (Step-by-Step)

Whether you're setting up an ICC, MFI, or P2P NBFC, here’s a brief on the NBFC registration process:

Step 1: Incorporate a Company

Register a private or public limited company with the Ministry of Corporate Affairs (MCA)
Must have “finance” or “fintech” in the name

Step 2: Meet Capital Requirements

Maintain minimum Net Owned Funds (₹2 crore for most NBFCs; more for specific types)

Step 3: Prepare Documents

Business plan
Net worth certificate
Board resolution
MOA & AOA
Banker’s report

Step 4: Apply Online to RBI

Visit the COSMOS portal for NBFC registration online
Submit application form and upload scanned documents

Step 5: Await RBI Approval

RBI may request clarifications
Once satisfied, RBI issues a Certificate of Registration (CoR)

Why Understanding NBFC Types Matters

Choosing the right NBFC structure is essential for:

Regulatory compliance
Business model alignment
Faster approval from RBI
Attracting the right investors

Each type comes with different capital needs, compliance burdens, and operational restrictions—so clarity is key before you begin the NBFC registration process.

Final Thoughts

India’s NBFC sector is diverse, dynamic, and full of opportunity. Whether you want to launch a microfinance company, operate a P2P lending platform, or build a data-centric Account Aggregator, the right business model starts with understanding NBFC types.

Once you've finalized your structure, ensure you’re prepared with the necessary capital, documentation, and compliance strategy before starting the NBFC registration online.

Need help with NBFC registration in India?
Enterslice can guide you through compliance, capital planning, RBI filing, and documentation to launch your NBFC smoothly.