, FInancial Modelling and Equity 1 @ IIM- INDORE, PGCFR at mangalayatan university and Candidate of CFA Level 1 at CFA institute, IPCC @ICAI
at Financial Modelling And Equity Valuation At IIM Indore
WHAT IS NBFCs A non-banking financial company (NBFC) is a company registered under the Companies Act, 1956 and is engaged in the business of loans and advances, acquisition of shares/stock/bonds/debentures/securities issued by government or local authority or other securities of like leasing, hire-purchase, insurance business, chit business. Does not include any institution whose principal business is that of industrial activity, sale/purchase/construction of immovable property.
Non-banking financial companies (NBFCs) are fast emerging as an important segment of Indian financial system. HOW? COZ……. Performs diversified range of functions. Such as financial services to individual, corporate . Helps the traditional institutions. Helps to small enterprises. Promotes the growth of economy.
It is an heterogeneous group of institutions (other than commercial and co-operative banks) performing financial intermediation. They raise funds from the public, directly or indirectly, and lend them to ultimate spenders. They advance loans to the various wholesale and retail traders, small-scale industries and self-employed persons. Gradually, they are being recognized as complementary to the banking sector due to their customer-oriented services;
simplified procedures; attractive rates of return on deposits; flexibility and timeliness in meeting the credit needs of specified sectors. A non-banking financial company (NBFC) is a company registered under the Companies Act, 1956 . The working and operations of NBFCs are regulated by the Reserve Bank of India (RBI) within the framework of the Reserve Bank of India Act, 1934 (Chapter III B)
The types of NBFCs registered with the RBIare:- Equipment leasing company:- is any financial institution whose principal business is that of leasing equipments or financing of such an activity. Hire-purchase company:- is any financial intermediary whose principal business relates to hire purchase transactions or financing of such transactions.
Loan company:- means any financial institution whose principal business is that of providing finance, whether by making loans or advances or otherwise for any activity other than its own (excluding any equipment leasing or hire-purchase finance activity). Investment company:- is any financial intermediary whose principal business is that of buying and selling of securities.
Now, these NBFCs have been reclassified into three categories:- December 6, 2006 Asset Finance Company (AFC): AFC is defined as a financial institution whose principal business is that of financing the physical assets which support various productive/economic activities in the country. Investment Company (IC) Loan Company (LC).