NBFCs
Banking · NBFC
📋Quick Overview
Non-Banking Financial Companies (NBFCs) are financial institutions registered under the Companies Act, 1956/2013 and regulated by the RBI under the RBI Act, 1934 (Chapter IIIB). They provide banking-like services — loans, credit facilities, insurance, investments — but they are NOT banks. NBFCs cannot accept demand deposits (savings/current accounts), cannot issue cheques, and are not part of the payment and settlement system. They do not need a banking license. However, they need to be registered with RBI if their principal business is financial activity.
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NBFCs: Registered under Companies Act | Regulated by RBI | Cannot accept demand deposits | No CRR/SLR required (but RBI may impose) | NOT part of payment system
📖Types of NBFCs
| Type | Full Name | Function | Example |
|---|---|---|---|
| NBFC-AFC | Asset Finance Company | Finances physical assets (vehicles, equipment) | Shriram Transport, Sundaram Finance |
| NBFC-IC | Investment Company | Invests in securities (shares, bonds) | Various holding companies |
| NBFC-LC | Loan Company | Provides loans (personal, business) | Bajaj Finance, Muthoot Finance |
| NBFC-IFC | Infrastructure Finance Company | Finances infrastructure projects | L&T Infrastructure Finance, PFC |
| NBFC-MFI | Micro Finance Institution | Small loans to low-income groups | Bandhan (before becoming bank), SKS |
| NBFC-P2P | Peer to Peer Lending Platform | Online platform connecting borrowers & lenders | Faircent, LenDenClub |
| HFC | Housing Finance Company | Housing/home loans | LIC HFL, HDFC Ltd (before merger) |
📖NBFC vs Bank
📝Major NBFCs in India
- •Bajaj Finance — Largest NBFC by market cap, consumer loans
- •Muthoot Finance — Largest gold loan NBFC in India
- •Manappuram Finance — Gold loans and microfinance
- •LIC Housing Finance — Home loans, subsidiary of LIC
- •Shriram Transport — Largest commercial vehicle finance NBFC
- •Power Finance Corporation (PFC) — Infrastructure finance NBFC