Direct Tax
Consulting
ESG Advisory
Indirect Tax
Growth Advisory
Internal Audit
BFSI Audit
Industry Audit
Valuation
RBI Services
SEBI Services
IRDA Registration
AML Advisory
IBC Services
NBFC Compliance
IRDA Compliance
Finance & Accounts
Payroll Compliance Services
HR Outsourcing
LPO
Fractional CFO
General Legal
Corporate Law
Debt Recovery
Select Your Location
Non-Banking Financial Companies (NBFCs) are the financial institutions regulated by the Reserve Bank of India to provide credit facilities. Usually, NBFCs are more preferred over banks as they are quite efficient in meeting financial requirements. NBFC majorly covers those sectors i.e. Infrastructure, micro, small and medium enterprises that are not covered by the banks. In the articles, we will discuss the process and how the banks are different from NBFCs.
NBFC is playing a phenomenal role in the Indian economy by providing sound sources of funding. Conversion of NBFC into Banks results in access to lower-cost deposits and improved leverage. Banks majorly work with Public savings which require proper documentation
NBFCs are playing a vital role in the development of the country and also boosting the infrastructure, economic development, creation of wealth, employment generation. NBFC especially have focused on the weaker sections of the society.
To carry out a new division, NBFCs are offering a varied range of products, financing, leasing, housing finance, and gold loans i.e. consumer durable Loans by taking into consideration the following factors-
NBFCs are providing financial services to the various sectors of the society through the new and advanced technology to the consumers to maintain a direct link and communication with them.
The Bank and NBFCs function similarly to each other but there is some power given to Banks only. i.e.
Below mentioned activities can only perform by the Banks-
Non-banking financial companies (NBFCs) are seen as one of the key aspirants to receive the banking regulator’s clearance to inroad in the banking space. However, some of the NBFCs may face a problem to meet the criteria of converting NBFC into a bank.
Before Conversion of NBFC Into Banks, below mentioned conditions are required to be fulfilled-
NBFCS shall satisfy the following criteria for converting the NBFC into Private sector banks –
Further for conversion NBFCs are required to comply with Capital Adequacy Ratio and all other requirements such as-
The process of Conversion of NBFC into Banks is a difficult process to implement as it depends on the business model of individual NBFCs. Implementing the same long-term strategy for conversion can turn wrong. In India, the part of NBFC is growing at the charge of banks. There are so many advantages of banks over NBFCs.
Also Read: New External Commercial Borrowings Norms for NBFC Funding
On June 08, 2023, the Reserve Bank of India issued guidelines on default loss guarantee on thei...
The gaming industry in India has made a remarkable transformation in iGaming in the year 2023;...
A company needs cost-effective financial management for overall survival and growth. This invol...
Automotive industry audit checklist as the process audits is made simpler and generates better...
An Automotive Dealerships Audit Checklist helps in an examination and review of aspects related...
Are you human?: 8 + 6 =
Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality
The loan moratorium permits deferment of loan interest servicing and repayment for a period of three months. The Re...
10 Sep, 2022
The Reserve Bank of India (RBI) is likely to tighten the certain regulations which govern Non-Banking Financial Com...
13 Sep, 2022