India Regulatory Advisory for Financial Services Firms

India's Financial Services Regulatory Landscape

Financial services is one of the most heavily regulated sectors in India. Foreign companies in banking, asset management, insurance, payments, and fintech face a multi-regulator environment: the Reserve Bank of India (RBI) governs banking and payments, SEBI regulates capital markets and asset management, IRDAI covers insurance, and the Ministry of Finance oversees FDI policy in the sector. Getting regulatory strategy right from day one is essential — licensing timelines in financial services can run 12–36 months, and missteps are expensive to unwind.

Services for Financial Services Companies

SEBI Registration for Foreign Portfolio Investors (FPI)

Foreign institutional investors, hedge funds, and asset managers wishing to invest in Indian equity and debt markets must register as Foreign Portfolio Investors (FPIs) with SEBI under the FPI Regulations, 2019. We advise on FPI category eligibility (Category I vs II), assist with the registration process through a Designated Depository Participant (DDP), and manage ongoing compliance including quarterly reporting and KYC maintenance.

NBFC Licensing & RBI Compliance

Foreign companies wishing to lend in India — whether as a captive finance company for their own customers or as a standalone NBFC — must obtain RBI registration under the Companies Act and RBI Master Directions. We advise on NBFC licensing requirements, minimum NOF (Net Owned Funds) thresholds (currently INR 10 crore), fit-and-proper criteria for directors, and ongoing prudential compliance including NPA classification and capital adequacy requirements.

FEMA Compliance for Financial Services Entities

Financial services FDI has sector-specific FEMA regulations. Automatic route limits apply to certain activities (e.g. 74% in private banks) while others require Government approval. All FDI must be reported via the Single Master Form (SMF) on the RBI portal. Dividend repatriation, inter-company loans, and guarantee structures for financial services entities each have specific RBI approvals and documentation requirements that we manage end-to-end.

Transfer Pricing for Financial Services Related-Party Transactions

Inter-bank loans, fund management fee arrangements, advisory fee structures, and intra-group financial guarantees between Indian and overseas financial services entities require arm's length pricing documentation under India's transfer pricing regulations. We specialise in financial services transfer pricing, applying the appropriate tested methods (CUP, TNMM, profit split) for complex multi-jurisdictional financial arrangements.

GST for Financial Services

GST on financial services in India is complex — banking services, insurance, and asset management have specific exemption and taxability rules. Interest income is largely exempt, but processing fees, advisory fees, and fund management charges attract 18% GST. Cross-border financial services have nuanced place-of-supply rules. We manage GST registration, input tax credit optimisation, and monthly compliance for financial services entities.

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