INTRODUCTION ON NBFC'S INTRODUCTION, IMPORTANCE, REGULATIONS ON NBFC'S CATEGORIZATION BY RBI TYPES OF NBFC'S AND BANKS TOP FIVE NBFCS'S IN INDIA

1. NON BANKING FINANCIAL
COMPANIES

2. Contents
 Introduction
 Importance
 Regulation
 Categorization by RBI
 Types of NBFC’s
 Differences between NBFC and banks
 Top five NBFC’s in India

3. Introduction
 A Non Banking Financial Company
(NBFC) is a company registered under
the Companies Act, 1956 of India,
engaged in the business of loans and
advances, acquisition of shares, stock,
bonds hire-purchase, insurance business
or chit business but does not include any
institution whose principal business
includes agriculture, industrial activity or
the sale, purchase or construction of
immovable property.

4. Importance of NBFC
 In the present economic environment it is very
difficult to Cater need of the society by bank
alone ,so role of NBFC become indispensable .
 The role of NBFC as effective financial
intermediaries has been well recognized as they
have inherent ability to take quicker decision's ,
assume greater risk and customize there
service's and charges more according to the
needs of the client.
 At present NBFC in India have became
prominent in a wide range of activities like hire
purchase finance ,equipment lease finance,
loans , investments.
 To help in developing large no of industries as
well as entrepreneur in different sector of
different areas.

5. Regulation
 In terms of section 45-IA of the RBI act
1934
its mandatory that every NBFC should
be registered with RBI to commence
any business of NBFC as defined in
clause(a) of section 45 I of the RBI act
1934.

6. Categorization by RBI
 Deposit taking NBFC( nbfc – d)
ex: shriram city union finance ltd
 Non deposits taking NBFC
ex: muthoot finance

7. Types of NBFC’S
 Asset financing company
 Infrastructure finance company
 Investment company
 Loan company
 Miscellaneous non-banking
company's
 Gold loan NBFC’S

8. 1.Asset Finance company
 An AFC is a company which is a financial institution carrying
on as its principal business the financing of physical assets
supporting productive/economic, such as automobiles,
tractors, lathe machines cranes, generator sets, earth moving
and material handling equipments
2. Infrastructure finance
company
 IFC is a non-banking finance company a) which deploys at
least 75 per cent of its total assets in infrastructure loans, b)
has a minimum Net Owned Funds of Rs. 300 crore, c) has a
minimum credit rating of ‘A ‘or equivalent d) and a CAR of
15%.

9. 3.Investment company
 It means a company which is a
financial institutions carrying on its
main business of the acquisition
securities.
4.Loan company
 It means any company which is a
company which is a financial
institutions carrying on its main
business by providing finance whether
by making loans or advances

10. 5.Miscellaneous non banking
company
 Miscellaneous non banking company
are the companies engaged in the chit
fund business

11. 6.Gold loan NBFC in India
 95% of gold loan business is handled
by three Kerala based company's viz
muthoot finance Manapuram finance
,and muthoot fincorp.
 Growth of gold loan NBFC is
evaluating from various factors
including Asset under
management(ASM), number of
branches and number of customers.

12. Difference between NBFCS &
Banks
 an NBFC cannot accept demand
deposits;
 Maintenance of reserve ratios is not
required
 an NBFC cannot issue cheques drawn
on itself, and DD
 deposit insurance facility of the
Deposit Insurance and Credit
Guarantee Corporation is not available
for NBFC depositors, unlike banks.

13. Top 5 NBFC in India
 HDFC ltd
 Aditya Birla finance ltd
 LIC housing finance ltd
 Bajaj finserv
 Indiabulls housing finance ltd

14. Thank you