A Non-Banking Financial Company (NBFC) is a company that is registered under the Companies Act of 2013 and is engaged in the business of loans and advances, the acquisition of shares/stocks/bonds/debentures/securities issued by the government or a local authority, or other marketable securities of a similar nature, leasing, hire-purchase, insurance, and chit business.
Non-Banking Financial Companies (NBFCs) do not have legitimate banking licenses like commercial banks, but they do offer a variety of very supportive and helpful services to public depositors, borrowers, and investors in some areas of business (after receiving an NBFC License from the RBI).
The following two requirements must be met by any entity seeking an NBFC license from the RBI:
- It must be a corporation formed under the Companies Act of 2013.
- It should be a corporation with a net worth of at least INR 2 crores.