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 marketable nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, sale/purchase/construction of immovable property. A non-banking institution which is a company and which has its principal business of receiving deposits under any scheme or arrangement or any other manner, or lending in any manner is …show more content…
This study is done only by the information from secondary data.
CHAPTER 2: CONCEPET OF NBFC
The financial sector in any economy consists of several intermediaries. Apart from banking entities, there are investment intermediaries (such as mutual funds, hedge funds, pension funds, and so on), risk transfer entities (such as insurance companies), information and analysis providers (such as rating agencies, financial advisers, etc), investment banks, portfolio managers and so on.
All such entities that offer financial services other than banking, may be broadly called nonbanking financial institutions. Banking is commonly understood to mean taking of deposits withdraw able on demand or notice - that is, banks can hold people's deposits and promise to pay them on demand. There are varieties of other entities that may accept deposits - hence, acceptance of deposits is not the essence of banking.
In India, the term "non-banking financial companies" acquires a new meaning, and a huge significance. The meaning of the term is such entities which are not banks, and yet carry lending activities almost at par with banks. They may also accept deposits - however, these deposits are term deposits and not call deposits.