The Two Eligibility Criteria — Both Must Be Met
The entity does not borrow from banks, issue debentures, accept deposits, or access any other form of public money. It operates purely on internal / promoter capital.
The entity has no direct interaction with retail customers or borrowers. It does not originate loans, sell financial products, or engage in any customer-facing financial activity.
The most common type of entity that qualifies is a family office or group investment vehicle — a company that invests internal capital in group companies, bank deposits, government securities, or bonds, without accessing any external funds and without having any borrower or customer relationship.
The Surrender Process — What Is Required
The Board must pass a resolution confirming that the entity (a) meets the no-public-funds and no-customer-interface criteria, (b) has no intention to access public funds or engage in customer-facing activity, and (c) undertakes to disclose its status as an Unregistered Type I NBFC in all relevant communications.
Three years of audited financial statements must be submitted, along with an auditor's certification of the entity's status with respect to public funds and customer interface for each of those three years. This is the critical compliance safeguard — RBI is relying on the auditor's independent verification.
The application is submitted through RBI's PRAVAAH portal. Physical surrender of the Certificate of Registration is also required — the original CoR must be submitted to RBI.
Even after surrendering the CoR, the entity must continue to disclose its Unregistered Type I NBFC status. If circumstances change — if the entity later accesses public funds or acquires a customer interface — it must register with RBI immediately. Operating without registration when required is a serious violation.
Why This Is Not Always the Right Decision
Surrendering the CoR is a one-way decision in practice. Reacquiring an NBFC registration involves the full application process — minimum Net Owned Fund requirements, fit and proper certification, business plan approval, and RBI scrutiny. Entities that might access public funds or launch customer-facing products in the foreseeable future should be cautious.
There is also a regulatory arbitrage risk that RBI has flagged: entities could structure their activities to qualify as Unregistered Type I at year-end while effectively conducting regulated financial activities during the year. RBI has signalled that it will monitor for such patterns, and the consequences of being found to have violated the criteria after deregistration are severe.
Evaluating whether your entity qualifies to surrender its CoR?
A structured eligibility assessment will confirm whether your entity meets both criteria, the risks of deregistration, and whether it is the right strategic decision before the September 2026 window closes.
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