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
NBFC is a company registered under the Companies Act, 2013. NBFC is regulated by the Reserve Bank of India (RBI). It is defined under RBI in Section 45-IA of RBI Act, 1934 that NBFC is a non-banking financial institution whose main business is lending of loans or receiving of deposits in any arrangement. This article is explaining the difference between NBFC & Micro Finance Company.
It is a kind of bank which is providing banking services. The main functions of NBFC are lending loans, receiving deposits; acquisitions of shares, debentures, stocks issued by the government or other marketable securities, leasing, or hire purchase agreements are entered by them. However, the core business cannot be sale or purchase of immovable property or its construction. It cannot include any business activity or agricultural activity, or any other industrial activity.
It provides financial support to business houses and individuals. It gives loans, working capital loans, personal loans, shared investments, leasing and also engaged in the insurance business.
A Nidhi Company is a type of non-banking financial company. It is covered under section 406 of the Companies Act, 2013[1]. It is a company whose business is the lending of loans or the receiving of deposits is done between only its members, for their mutual benefit. It is a company that is a public limited company and governed by the rules of a central government for such class of companies. The government defines its transactions from time to time.
Read our article:A Brief Comparison on Nidhi Company vs NBFCs
Microfinance companies are commonly termed as microcredit, or micro benefit organization. They are mostly registered in the section8 of the Companies Act, 2013.
The micro finance company is a type of, non-banking financial intuition whose business is to provide loans. The main objective is to give small scale financial services, in the format of loan, or credit facilities, or savings facility.
There are two types of a microfinance company which has been allowed in India, one which has to be registered with RBI and the other like a non-profit organization which has to be first registered as the Section 8 Company under the Companies Act, 2013 and where no approval of RBI is required.
It can be concluded that:
Read our article:Non-Banking Financial Company vs Micro Finance Institution
India's financial sector is changing due to advancements in technology and new regulations. GIF...
The Indian startup ecosystem, which is the third-largest in the world, is expected to become a...
India's startup ecosystem has recently experienced a rapid rise as a global powerhouse. Several...
In the Union Budget 2024, Finance Minister Nirmala Sitharaman announced several changes to the...
Digitalization has widely transformed the insurance market in India. Traditional practices are...
Are you human?: 9 + 4 =
Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality
Non-banking financial companies have a significant role to play in the India’s current financial system. It broad...
14 Feb, 2022
IRDAI, on 14th November 2022, rolled out a new circular for all the Life Insurers, General Insurers, Health Insurer...
28 May, 2024