Non-Banking Financial Companies NBFCs are financial institutions that provide services ranging from loans to advances, as well as the acquisition of shares/stocks/bonds/debentures/securities issued by the government or a local government, as well as other marketable securities of a similar nature in the leasing, hire-purchase, and insurance industries. NBFC is governed by the Companies Act of 1956.
NBFC Companies’ Key Characteristics
- Non-banking financial institutions are another name for non-banking financial firms (NBFIs).
- These are financial institutions that provide bank-like services but do not have a banking license.
- As a result, NBFCs are not subject to the same banking laws and scrutiny that regular banks are.
- The Reserve Bank of India and the Ministry of Corporate Affairs regulate NBFCs.
Non-banking financial businesses (NBFCs) play a critical role in India’s financial system and have made significant progress in the recent decade. These financial institutions have infiltrated the country’s most distant corners, providing financing to the millions of individuals and small businesses who are typically overlooked by banks.
Finance aptly dubbed the “lifeblood of business,” is scarce for many startups, small businesses, and people who are unable to meet the banks’ strict requirements. NBFCs have stepped in to save such businesses and provided them with a lifeline.
According to research by the Microfinance Institutions Network (MFIN), the gross loan portfolio (GLP) increased by 47.85% in the quarter ending September 30, 2019. According to the report, revenue increased to Rs 2.01 lakh crore from Rs 1.36 lakh crore in the same quarter of 2018.
NBFCs and Microfinance Institutions provided the second-highest loan amount outstanding of Rs 62,960 crore, accounting for 31% of the overall sector portfolio.
According to the MFIN study, the on-balance sheet portfolio of 85 NBFC-MFIs was Rs 62,960 crore as of September 30, 2019, up 17 percent from the previous fiscal year, and it currently covers 601 districts throughout 35 states and union territories in India.
List of Top RBI Registered NBFC Companies
Here is the list of some Top RBI Registered NBFC Companies
Power Finance Corporation Limited
Power Finance Corporation Limited is a Navratna Status firm established in the year 1986. The company’s Chairman and Managing Director are Rajeev Sharma. Power Finance Corporation Limited is known for supporting lots of power projects in the country with financial aid. It aids organizations that work in the power generation, transmission, and distribution industries.
Shriram Transport Finance Company Limited
Shriram Transport Finance Company Limited specializes in commercial and business vehicle financing, among other things. Since 1979, the company has provided financing for Light Duty Trucks, Heavy Duty Trucks, Mini Trucks, Passenger Vehicles, Construction Vehicles, and Farm Equipment. General insurance, mutual funds, common assets, stockbroking, and general protection are the company’s specialties.
Bajaj Finance Limited
Bajaj Finserv is a subsidiary of Bajaj Holdings and Investments, which was created in 2007. It is a well-known finance organization that provides loans to doctors for professional advancement, home loans, gold loans, individual loans, business loans, and entrepreneur loans. Apart from these, Bajaj Finserv also offers wealth management, money lending, and general insurance. It has approximately 1400 locations in the country and employs more than 20000 people.
Mahindra & Mahindra Financial Services Limited
MMFSL (Mahindra & Mahindra Financial Services Limited) was established in the year 1991 and now has more than 1000 branches and more than 3 million customers across the country. MMFSL is a well-known organization with two affiliates that provide insurance and financial services for rural homes. It also offers gold advances, vehicle advances, corporate advances, housing credits, working capital advances, and a variety of other services.
Muthoot Finance Ltd
Muthoot Finance Ltd was India’s first non-banking financial company, founded in 1888 as a tiny lender in a Kerala village. It provides money transfers, foreign exchange, asset management, tourist, and travel services apart from funding gold transactions. Muthoot Finance Ltd solely provides its customers’ loans in exchange for gold jewelry. It is a market leader in the gold loan and finance business in India. Muthoot Finance Branches also sell gold coins. The company’s headquarters are in Kerala, India, and it has more than 4,400 locations across the country. Muthoot Housing Finance (India) Ltd, which provides housing loans, is also its parent firm.
HDB Finance Services
HDB Financial Services is run by HDFC Bank. Through a network of more than 1,000 branches in 22 Indian states and three Union Territories, it offers a wide range of secured and unsecured financial loans. Personal and doctor’s loans, business loans, vehicle loans, gold loans, new to credit loans, enterprise business loans, consumer durables loans, construction equipment loans, new and used automobile loans, equipment loans, and tractor loans are among the secured and unsecured loans offered. Lending Business and BPO Services are the company’s two segments. It is currently India’s fastest-growing non-banking financial company.
Chola began as an equipment financing firm and has grown to become a full-service financial services provider, offering customers auto financing, home loans, home equity loans, SME loans, investment advisory services, stockbroking, and a variety of other financial services. Chola has 725 offices across India, with over INR 35,000 crores in assets under control.
Tata Capital Financial Services Ltd
Tata Capital Financial Services Limited is a Tata Sons Limited subsidiary that was founded in 2007. TCFS touts itself as a one-stop financial services supplier for corporate, retail, and institutional consumers in a variety of industries. It is a ‘Systemically Important Non-Deposit Accepting Non-Banking Financial Company (NBFC)’ according to the RBI. Commercial finance, infrastructure finance, wealth management, consumer loans, and the distribution and marketing of Tata Cards are just a few of the services provided by TCFS to people, families, and enterprises.
L & T Finance Limited
L & T Finance Limited, founded in 1994, is a major player in the non-banking financial sector. Based in Mumbai, L & T provides funding to a variety of industries, including trade, industry, agriculture, commercial vehicle loans, individual vehicle loans, corporate and rural loans, and corporate and rural loans. More than ten lakh people are served by the company. L & T was named “Company of the Year” at the Economic Times awards in 2010.
Aditya Birla Finance Ltd.
Aditya Birla Finance Limited, which is a subsidiary of Aditya Birla Financial Services, was founded in 1991 and is an ISO 9001:2008 certified non-banking financial company. ABFL is a ‘systemically important non-deposit taking NBFC,’ according to the RBI, and it is one of India’s top five private diversified NBFCs. It provides accurate and personalized solutions in a variety of areas, including corporate finance, commercial mortgages, capital markets, and structured financing.
The application form, as well as an overview of the documents that must be provided with the application, can be found at www.rbi.org.in NBFC List Forms/ Returns.
Systemically important NBFCs have assets of ₹500 million or more as of the most recent audited balance sheet.
No, the Circular will not apply to accounts that have been restructured.