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 are registered under the Companies Act and are governed by the RBI[1]. The activities of the NBFCs are similar to that of a bank but not exactly the same. They do not perform the primary activity of a bank which is accepting deposits from the public. NBFCs are engaged in providing financial services such as disbursement of loans and advances, acquisition of shares or bonds, etc. NBFCs have been contributing to the growth of the Indian economy by providing alternatives for transforming savings into investments.
Broad categories of different types of NBFCs are:
NBFC ICC (Investment and Credit Company) – It is a financial institution carrying on its principal business – asset finance, the providing of finance whether by making loans or advances or otherwise for any activity other than its own and the acquisition of securities.
Infrastructure Finance Company: These are the NBFCs that fulfill the following conditions:
Core Investment Company: These are the financial institutions that carry on the business of acquisition of shares and those satisfy the following conditions:
Infrastructure Debt Fund: These are registered as an NBFC for facilitating the longterm debt into infrastructure projects.
NBFC has been emerging in the banking & financial sector by meeting the needs of under served segments of society. They are a prominent player in the financial market that fills the gap left by traditional banks. Following are the key roles of NBFC for Economic Development:
1) Bank Finance to registered NBFCs
Infrastructure
Financing
Equipment leasing
Hire purchase
Loans & advances
Factoring
Investments
2) Bank Finance to unregistered NBFCs
Insurance Companies registered as per Section 3 of the Insurance Act
Nidhi Companies registered under the Companies Act
Chit Fund Companies with the principal business of Chit Funds.
Merchant Banking Companies registered under the SEBI Act.
Housing Finance Company registered & regulated under National Housing Bank is being exempted from registration by RBI.
Following activities of NBFCs are exempted from being financed by banks:
RBI has recently relaxed the lending norms of Banks to NBFCs and eases the bank’s exposure limits for helping the NBFC sector during the period of stress.
Read More: RBI Merges Three Categories of NBFCs Into NBFC – Investment and Credit Company (NBFC-ICC) to Ease Operational Flexibility.
SEBI, the regulatory body for markets, has directed stockbrokers to establish an institutional...
If you have lost track of your shares in Muthoot Finance Limited, they may have been transferre...
Customer Acquisition is essential for any successful organization, placing customers ahead of p...
The role of AMFI in NRI SIP investments is continuously growing in the Indian mutual fund marke...
India’s Financial Intelligence Unit has introduced a groundbreaking upgrade to its informatio...
Are you human?: 5 + 8 =
Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality
Credit Information Companies are the Credit Institutions, Companies or Specified Users which collect “data or cre...
04 Jan, 2021
In this article, we will be talking about the various provisions of the Companies Act, 2013 related to NBFC and Hou...
06 Sep, 2022