What is the full form of NBFC?
NBFC: Non-Banking Financial Company
The full form of NBFC is “Non-Banking Financial Company“. It refers to financial institutions that offer banking services without having a banking license or without complying with the legal definition of a bank. A Non-Banking Financial Company (NBFC) is registered in accordance with the Indian Companies Act 2013, NBFCs are involved in the business of loans and advances, acquisition of shares, bonds, stock, hire-purchase, insurance business and chit-fund business. NBFCs do not include agriculture activity, industrial activity, sale/purchase/construction of the immovable property, purchase or sale of any goods (other than securities).
Top 10 NBFCs in India
- Power Finance Corporation Limited
- Shriram Transport Finance Company Limited
- Bajaj Finance Limited
- Mahindra & Mahindra Financial Services Limited
- Muthoot Finance Ltd
- HDB Finance Services
- Cholamandalam
- Tata Capital Financial Services Ltd
- L & T Finance Limited
- Aditya Birla Finance Ltd
NBFCs can offer banking services, such as loans and credit facilities, foreign exchange, retirement planning, money markets, subscription and merger activities. The main difference between NBFC and the bank is that, in a bank, you can deposit money and withdraw it when you need it, but NBFC does not accept deposits and does not offer the facility of withdrawing money when the depositor needs it. NBFC deposits are not treated as savings, they are basically long-term deposits. NBFC examples are Investment banks, mortgage lenders, money market funds, insurance companies, hedge funds, private equity funds, and P2P lenders.