{"id":14231,"date":"2018-09-06T07:03:10","date_gmt":"2018-09-06T07:03:10","guid":{"rendered":"https:\/\/www.legalraasta.com\/blog\/?p=14231"},"modified":"2026-04-07T17:17:30","modified_gmt":"2026-04-07T11:47:30","slug":"faqs-nbfc-registration","status":"publish","type":"post","link":"https:\/\/www.legalraasta.com\/blog\/faqs-nbfc-registration\/","title":{"rendered":"FAQs on NBFC"},"content":{"rendered":"

FAQs on NBFC
\n<\/strong><\/h2>\n

NBFCs<\/span><\/a> or Non-Banking Financial Companies are a major contributor to the 12.5% GDP rise in India. In addition to this, NBFCs have a projected growth of a staggering 19-21% in the financial year 2018-19. So it’s pretty clear that NBFCs are a major part of India’s economy. So what are NBFCs? How do you form an NBFC? What are the compliances of NBFCs? In this piece, we are going to look at some FAQs on NBFC.<\/p>\n

What is NBFC?<\/strong><\/p>\n

NBFC stands for Non-Banking Financial company. NBFCs come under regulations set by the Reserve Bank of India(RBI). As the name suggests, NBFCs are companies providing financial services and they do so being a separate legal entity from banks.<\/p>\n

What are the services provided by NBFCs?<\/strong><\/p>\n

NBFCs provide a wide range of financial services to the general population.<\/p>\n

    \n
  1. Loan and Advances<\/li>\n
  2. Credit Facilities<\/li>\n
  3. Saving and Investment Plans<\/li>\n
  4. Acquisition of Stocks, Shares, Bond hire purchases<\/li>\n
  5. Money transfer service<\/li>\n
  6. Insurance Business or Chit fund Business<\/li>\n<\/ol>\n

    What is the difference between a Bank and NBFC?<\/strong><\/p>\n

    \n\n\n\n\n\n\n\n\n\n\n\n\n
    Bank<\/th>\nNBFC<\/th>\n<\/tr>\n<\/thead>\n
    Banks are government enabled financial intermediaries registered under the Banking Regulation Act,1949<\/td>\nNBFCs are Financial Companies Registered under the Companies Act, 2013<\/td>\n<\/tr>\n
    Banks are authorized to accept demand deposits<\/td>\nNBFCs cannot accept demand deposits<\/td>\n<\/tr>\n
    Banks have restrictions on Foreign Direct Investments.<\/td>\nNo restriction on Foreign Investments<\/td>\n<\/tr>\n
    Payment and settlement make up for the core activities of a bank.<\/td>\nNBFCs activities do not include payment<\/td>\n<\/tr>\n
    Banks are authorized to draw demand drafts on themselves<\/td>\nNBFCs cannot draw demand drafts on itself<\/td>\n<\/tr>\n
    Banks\u00a0 can draw and issue cheques on themselves<\/td>\nNBFCs cannot issue cheques drawn on themselves<\/td>\n<\/tr>\n
    Banks can create credit by multiplier financial services<\/td>\nNBFCs cannot create credit<\/td>\n<\/tr>\n
    Interests rates are generally moderate<\/td>\nInterest rates are most of the times little higher than banks<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

    Can NBFCs accept deposits?<\/strong><\/p>\n

    Not all NBFCs are authorized to accept public deposits. To accept public Deposits, NBFCs have to acquire a certificate of registration authorizing them to accept public deposits.<\/p>\n

    What are the different types of NBFCs in India?<\/strong><\/p>\n

    Broadly NBFCs are deposit-taking (NBFC-D) or no deposit NBFCs(NBFC-ND). NBFCs whose asset size exceeds Rs. 100 crore is called Systematically Important ( NBFC-SI).<\/p>\n

    Whether they are deposit-taking or not, NBFCs are classified on the basis of the services they are providing.<\/p>\n

    Given below is a list of types of NBFCs.<\/p>\n