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Thread: What is a Non-banking financial company (NBFC)?

  1. #1
    Satyrs Guest

    What is a Non-banking financial company (NBFC)?

    I am a Commerce student and i am interested to work in a banking sector. I heard about Non-banking financial company (NBFC) and that also provide a banking services. But i don't have an idea about this Non-banking financial company (NBFC). I want to know about it. What is a Non-banking financial company(NBFC)? How they work? And other important information related with NBFC. So please reply me as soon as possible.

  2. #2
    Join Date
    Jul 2008
    Posts
    289

    Re: What is a Non-banking financial company (NBFC)?

    Non-bank financial companies (NBFCs) are financial institutions that offer banking services without gathering the officially authorized description of a bank, i.e. one that does not hold a banking license. However this depends on the authority, as in some jurisdictions, such as New Zealand, any company can do the business of banking, and there are no banking licenses issued. It is an varied group of institutions (other than commercial and co-operative banks) performing financial inter-mediation in a variety of ways.

  3. #3
    Join Date
    Jun 2008
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    337

    Re: What is a Non-banking financial company (NBFC)?

    Non-banking financial companies or NBFCs are financial institutions that provide banking services, but do not hold a banking license. These institutions are not permitted to take deposits from the public. However, all operations of these institutions are still covered under banking regulations. NBFCs do offer all sorts of banking services, such as loans and credit services, money markets, underwriting, and merger activities. The number of non-banking financial companies has expanded really in the last a number of years as undertaking capital companies, retail and industrial companies have entered the lending business.

  4. #4
    Join Date
    Jun 2008
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    379

    Re: What is a Non-banking financial company (NBFC)?

    A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956. A non-banking institution which is a company and which has its main business of receiving deposits under any system or any other manner or lending in any manner is also a non-banking financial company.

    NBFCs are doing functions similar to that of banks; but there are a only some differences are as follows:-

    NBFC cannot accept demand deposits. NBFC is not a part of the payment and settlement system and as such an NBFC cannot issue cheques drawn on itself and deposit insurance facility of Deposit Insurance and Credit assurance Corporation is not obtainable for NBFC depositors dissimilar in case of banks.

  5. #5
    Join Date
    Jul 2008
    Posts
    360

    Re: What is a Non-banking financial company (NBFC)?

    Services provided by Non-banking financial company (NBFC) are as follows:-

    * act as suppliers of loans and credit facilities
    * supporting investments in property
    * trade money market instruments
    * fund private education
    * provide wealth management such as managing portfolios of stocks and shares
    * underwrite stock and shares, TFCs and other obligations
    * provide retirement planning
    * advise companies in merger and acquisition
    * prepare feasibility, market or industry studies for companies
    * provide discounting services e.g., discounting of instruments

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