In India, Non-Banking Financial Companies (NBFCs) are fast becoming powerful players in the financial ecosystem. They’re filling the gaps left by traditional banks and bringing innovative financial services to the people, especially in underserved areas.
With the rise in digital payments and demand for flexible credit, a common question arises: Can NBFCs offer credit cards and payment solutions? The short answer is yes, but with conditions. In this blog, we’ll explore how NBFCs can enter the credit and payment solution space, the licenses required, and what the future holds.
What Are NBFCs?
NBFCs are financial institutions that offer banking-like services without holding a banking license. They are regulated by the Reserve Bank of India (RBI) and provide loans, asset financing, leasing, investment advisory, and more. However, they cannot accept demand deposits (like savings or current accounts) from the public.
NBFCs are classified into different categories such as:
NBFC-Investment and Credit Companies (NBFC-ICC)
NBFC-Peer to Peer Lending Platforms (NBFC-P2P)
NBFC-Account Aggregators (NBFC-AA)
Infrastructure Finance Companies (IFC)
Core Investment Companies (CIC), etc.
Can NBFCs Issue Credit Cards?
As per RBI rules, only banks are allowed to issue credit cards directly. However, NBFCs can collaborate with banks to offer co-branded credit cards. In this setup, the NBFC handles customer acquisition and credit underwriting, while the bank issues the card and handles settlement.
Bajaj Finserv partnered with RBL Bank to offer a co-branded SuperCard.
Slice, an NBFC-backed fintech, partnered with SBM Bank India to issue credit cards with flexible repayment options.
So, while NBFCs cannot issue credit cards independently, they can leverage partnerships to provide credit card-like services.
Can NBFCs Offer Payment Solutions?
Yes, NBFCs can offer payment solutions—but they need special licenses from the RBI and often collaborate with payment companies or banks.
Here are the top payment-related services NBFCs can offer with the right permissions:
1. Prepaid Payment Instruments (PPI License)
PPIs are tools like digital wallets, prepaid cards, and gift cards that store money and can be used for digital payments.
If an NBFC wants to issue wallets or prepaid cards, they must apply for a PPI license online from the RBI.
Digital wallets like PhonePe, Freecharge, or Paytm started as PPIs.
NBFCs can issue prepaid cards for salary disbursement, travel, or gifting.
Apply online to RBI
Minimum positive net worth of ₹5 crore
Comply with KYC norms and cyber security guidelines
2. Peer-to-Peer Lending Platforms (P2P License)
NBFCs can also enter the fintech lending space by offering P2P lending services. These platforms connect borrowers with individual lenders.
To operate as a P2P platform, the NBFC must apply for a P2P lending license online with the RBI.
Digital loan approval
Low operational costs
Quick onboarding
3. Account Aggregator License (AA License)
The Account Aggregator framework allows a licensed entity to collect and share user financial data with their consent. This helps in faster credit assessment, especially for new-to-credit customers.
NBFCs can apply online for an NBFC Account Aggregator License from RBI to act as a financial data intermediary.
Better credit underwriting
Access to verified borrower data
Facilitates better financial inclusion
Requirements for NBFCs to Offer These Services
To offer any of the services mentioned above, NBFCs must first obtain an**** NBFC License with RBI. This license is mandatory to operate legally in India.
Company Formation – Register a company under the Companies Act.
Capital Requirement – Minimum ₹2 crore net owned funds.
Apply to RBI – File your application via the RBI COSMOS portal.
Compliance – Meet KYC, CISA audit, risk management, and financial disclosures.
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FAQs
No. Only banks are allowed to issue credit cards directly. NBFCs can offer co-branded credit cards in partnership with a bank.
NBFCs must obtain a PPI license from RBI to offer digital wallets or prepaid cards.
This license allows an NBFC to collect and share financial data with user consent for better lending decisions.
Yes. NBFCs must apply for a P2P lending license with RBI to operate a lending platform.
Yes, a newly registered company can apply for an NBFC License with RBI, provided it meets capital and compliance requirements.
Conclusion
NBFCs in India are evolving beyond traditional lending. With regulatory approvals and strategic partnerships, they can offer credit cards, digital payments, PPI services, and account aggregation. While they can't issue credit cards directly, they have plenty of options to stay competitive in the fintech space.
As digital finance continues to grow, NBFCs will play a central role in shaping the future of payments and credit in India.
Need help applying for any NBFC-related license? Let Corpbiz guide you.
Author: Atul Shukla
Senior Compliance Expert at Corpbiz Atul has helped over 500 fintech firms navigate RBI licensing and compliance. He writes regularly on topics related to NBFCs, digital finance, and fintech law.