NBFC - Everything About Non-Banking Finance Company

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NBFCs - Definition

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Demand of NBFC Types of NBFCs

Documents Overview NBFC vs Bank NBFC Advisory

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Process Overview

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RBI on NBFC

C F B T N U O

OVERVIEW OF THIS DOC

A NON-BANKING FINANCE COMPANY

RBI ACT 1934

FUNCTIONS OVERVIEW

NBFC (Non-Banking Financial Company)

An NBFC can provide both secured and

is engaged in financial activities as

unsecured loans to the takers based on

defined under section 45-IA of the RBI

alternative lending models. The

Act 1934

government has been promoting NBFC so that the unorganised money lenders and people willing to run financial services can organise their lending operations.

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E F

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O

F

S

RBI

ASSET FINANCE COMPANY Loans for operating heavy assets such as automobiles, excavators, generators (accounting for 13.7% of the total number of NBFCs)

LOAN COMPANY Operating loan business (36.2% of the total number of NBFCs)

INVESTMENT COMPANY Buying and selling securities (Accounting for 12.6% of the total number of NBFCs)

INFRASTRUCTURE FINANCE COMPANY Provide infrastructure loans (31.5% of the total number of NBFCs)

SYSTEMICALLY IMPORTANT CORE INVESTMENT COMPANY Equity Investment

INFRASTRUCTURE DEBT FUND Provide investment in infrastructure debt funds

MICRO FINANCE INSTITUTION (MICROFINANCE) Microfinance to SMEs (3.0% of the total number of NBFCs)

FACTOR (ACCOUNTS RECEIVABLE) Accounts Receivable financing

NON-OPERATIVE FINANCIAL HOLDING COMPANY Allow sponsor / sponsor groups to set up new banks

MORTGAGE GUARANTEE COMPANY Provide Mortgage Loan

AMOUNT AGGREGATOR Collect, organize and provide customers with financial asset information

P2P Provide P2P lending platform

INDIAN RBI ACT DEFINES NBFC AS 1. Companies registered under the Companies Act;

Companies engaged in the provision of credit facilities such as loans and advance payments, securities and debt, and other securities, leasing, installment, insurance and other businesses.

A non-bank institution is a company registered under the "Company Law" whose main business is to accept deposits under any plan or arrangement in installments in a lump sum, installment or any other manner, which is also referred to in this law Non-bank financial company.

However, according to the RBI Act, the following categories are not part of the NBFC's competence: 1. Any institution whose main business includes agricultural activities; 2. Any institution whose main business includes industrial activities; 3. Any institution whose principal business includes the purchase or sale of any goods (other than securities); 4. Any institution whose principal business includes providing any services and selling / buying / constructing real estate.

FACTORS FOR NBFC DEVELOPMENT

Burden of public

Lack of traditional

Heavy credit

Due to increased

sector

banks in rural areas

demand

consumption

PROCESS OVERVIEW In order to establish any of these types of financial institutions, a registration number must be received from the Reserve Bank of India. To register for NBFC, applicants must submit the required form to the Reserve Bank of India for inspection, along with the required attachments. Once it is confirmed that the requirements of the RBI Act have been complied with, a registration certificate is issued to the agency.

The applicant must be a company The company has a minimum net registered under the latest Company capital of Rs 2 crore Law

The company's CIBIL (Indian Credit Board of directors should have member from finance background or banking experience.

Registration Agency) records no violations

REQUIREMENTS OVERVIEW

For specific

A company

categories of

registered

Should have a

under the

minimum net

Companies

ownership of

Act;

Rs 2 crore;

NBFCs, there is a specific net ownership funding requirement

NBFC IS DIFFERENT FROM BANKS

NOT ACCEPT

NOT A PART OF

CANNOT ISSUE

DEPOSITORS

DEMAND

THE PAYMENT

ITS OWN CHECK

CANNOT ENJOY

DEPOSITS

AND

DEPOSIT

SETTLEMENT

INSURANCE

SYSTEM

NBFC CAN OFFER SERVICES P2P

HIRE-PURCHASE

INSURANCE

CURRENCY

Presentations are

Presentations are

Presentations are

EXCHANGE

communication tools.

communication tools.

communication tools.

Presentations are communication tools.

LOANS AND

ASSETS

ACQUISITION

STOCK, BONDS

CREDIT

FINANCING

OF SHARES

Presentations are

FACILITIES

Presentations are

Presentations are

communication tools.

Presentations are

communication tools.

communication tools.

communication tools.

MEET OUR ADVISERS

MRS MONISHA

MR ABHISHEK

MISS SUMAN JHA

CHAUDHARY

KUMAR

Senior NBFC Advisor

Additional Director - Swarit

Advisory Head - NBFCs

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