NBFC Full Form: Top Non-Banking Financial Companies List

NBFC: Full form, History, Types and The Top Listed NBFCs in India

What is NBFC Full Form?

NBFCs full form is  Non-Banking Financial Companies, a financial organisation without a banking licence that provides a range of banking services, including advances, personal loans, and investments. NBFC finance is crucial to sectors that are not adequately served by traditional banks.

What is an NBFC?

A non-banking financial company (NBFC) is a kind of financial organization that functions without a banking license but offers banking services like those of regular banks. Loans, advances, asset management, investment advisory services, and wealth management are just a few of the financial services provided by NBFCs. They play a vital role in the financial system by catering to the credit needs of individuals and businesses. Non-banking financial companies are regulated by the Reserve Bank of India (RBI) in India and other relevant regulatory authorities in different countries. Best NBFCs offer a wide range of options which is quick and convenient for those in financial need. In this blog, we will go deeply into the meaning, history, role, and importance of NBFC finance.

History of NBFC Company

Non-banking financial companies (NBFCs) have been around in India since the 1960s, initially primarily as deposit-taking institutions. The regulation and supervision of NBFCs in India came under the purview of the Reserve Bank of India (RBI) with the passing of the Reserve Bank of India Act, of 1934.

In recent years, NBFC finance has continued to evolve, adapting to technological advancements, and changing consumer preferences. They have embraced digital channels for customer acquisition, lending, and other financial services. NBFCs have played a crucial role in promoting financial inclusion by reaching underserved segments of the population and providing them with access to credit and other financial services.

Even though NBFCs have made a substantial contribution to the growth and advancement of the Indian economy, they also face challenges including managing risks, complying with regulations, and funding limitations. Overall, NBFCs have become an integral part of India’s financial system over the years.

Also Read: Why Opting For an NBFC Personal Loan is a Better Option?

 Examples of Non-Banking Financial Companies in India

* Respo Financial Services Limited(Zype)

* Bajaj Finance Limited

* Mahindra & Mahindra Financial Services Limited

* Shriram Transport Finance Company Limited

* L&T Finance Holdings Limited

* HDFC Limited (Housing Development Finance Corporation)

What Are the Services Offered by NBFCs?

A few of the services offered by NBFCs are:

Loan services: NBFCs offer various types of loans such as personal loans, business loans, vehicle loans, consumer durable loans, loans against property, etc.

Asset Financing: You can get finance for the purchase of assets such as machinery, equipment, and vehicles, either through leasing or hire purchase arrangements.

Investment Services: NBFCs provide investment products and services like mutual funds, portfolio management, wealth management, and advisory services to individuals and businesses.

Insurance Services: NBFCs provide insurance products such as life insurance, general insurance, health insurance, and more.

Microfinance: Most NBFCs provide microfinance services to underserved segments of the population, offering small Personal loans and financial services to low-income individuals and micro-entrepreneurs.

Housing Finance: NBFCs engaged in housing finance provide home loans, construction finance, and other related services to individuals and developers for residential and commercial properties.

Payment Services: Many NBFCs provide payment processing services, prepaid cards, mobile wallets, and other electronic payment solutions.

Depository Services: Certain NBFCs offer depository services, allowing investors to hold and transact securities in electronic form.

Credit Rating Services: Some NBFCs provide credit rating services to evaluate the creditworthiness of individuals, businesses, and financial instruments.

These are only a few of the services provided by NBFCs; the precise services may differ based on the NBFCs’ kind and the laws and regulations in effect in that nation.

Different Types of NBFCs

Asset Finance Companies: Specialize in financing the purchase of physical assets like vehicles, equipment, and machinery.

Investment Companies (ICs): Focus on investing in securities, shares, bonds, and other financial instruments.

Loan Companies (LCs): primarily offer advances and loans to people and companies for a range of uses, including business, housing, and personal loans.

Infrastructure Finance Companies (IFCs): Committed to funding infrastructure projects, including power plants, highways, bridges, and airports.

Microfinance Institutions (MFIs): Offers financial services, especially small loans, to low-income segments and micro business owners in both rural and urban locations.

Non-Deposit Taking NBFCs (NBFC-ND): NBFCs that do not accept deposits from the public but provide credit and other financial services.

Deposit-taking Taking NBFCs (NBFC-D): Authorized to accept deposits from the public and provide credit facilities, subject to RBI regulations.

Housing Finance Companies (HFCs): Specializes in offering finance for residential property acquisition, building, and renovation. 

Role and Objectives of Non Banking Financial Company

NBFCs offer loan facilities to people, companies, and industries that traditional banks are unable to sufficiently serve.

* They promote financial inclusion by reaching out to underserved segments of society, such as rural areas and low-income groups.

* They fund small and medium enterprises (SMEs), promoting entrepreneurship and economic growth.

* Some NBFCs offer wealth management services, assisting clients in managing their investments, assets, and financial planning.

* NBFCs offer customized financial products and services to meet the specific needs of borrowers, offering flexibility in terms and conditions.

* NBFCs complement traditional banks by offering alternative financial services and filling gaps in credit provision.

* NBFCs follow the Reserve Bank of India’s (RBI) regulatory requirements to protect consumers and uphold financial stability.

Process of incorporation of a Non-Banking Financial Corporation (NBFC)

 Obtain a digital signature certificate (DSC) for authentication of electronic documents and transactions.

* Obtain a director identification number (DIN) for each director involved in the NBFC.

* Reserve a unique name for the NBFC and ensure it complies with regulatory guidelines.

* Draft and prepare the Memorandum of Association (MoA) and Articles of Association (AoA) by the Companies Act and NBFC regulations.

* Sign and stamp the MoA and AoA, ensuring compliance with applicable stamp duty requirements.

* File the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form along with MoA, AoA, and other necessary documents on the Ministry of Corporate Affairs (MCA) portal.

* Await verification and approval of the SPICe+ form and accompanying documents by the Registrar of Companies (RoC).

* Upon successful verification, receive the Certificate of Incorporation (CoI) from the RoC, marking the completion of the NBFC incorporation process.

Top NBFCs in India

Below listed are the top NBFCs in India are:

* Bajaj Finance Limited

* Mahindra & Mahindra Financial Services

* Shriram Transport Finance Company Limited

* L&T Finance Holdings Limited

* HDFC Limited (Housing Development Finance Corporation)

* Tata Capital Limited

* Muthoot Finance Limited

* Power Finance Corporation Limited

* Aditya Birla Finance Limited

* India bulls Housing Finance Limited.

* Respo Financial Service Limited (Zype)

Another best NBFC in India is Zype. If you’re wondering how to get a personal loan instantly, just loan from Zype Loan App!. From a convenient application to quick disbursal you can get a personal loan online.Apply in less than 5 minutes with Zero documentation or paperwork. Just fill out your basic details like your name, PAN number, employment details, etc. and get approved for your personal loan upto Rs.5 lakhs in less than 60 seconds.

Also Read: Personal Loan from NBFC – Check Documents & Interest Rate

Final Thoughts

Non-banking financial companies (NBFCs) are essential players in the Indian financial system. They are crucial in providing credit, investments, and other financial services. Because they are flexible and have a deep understanding of the financial needs of both individuals and businesses, NBFCs are the go-to partners for borrowers who are looking for customized solutions. It has a vital role in promoting financial inclusion and is flexible as per the shifting market conditions.

Frequently Asked Questions

Which is the Top NBFC in India?

Respo Financial Services Limited is one of the top and best NBFCs in India due to its extensive offerings, strong financial performance, and market presence.

How Many NBFCs are Listed in India?

There are over 9,000 registered NBFCs in India, but not all are listed on stock exchanges. The number of listed NBFCs varies over time due to regulatory changes and market dynamics.

Who Controls NBFCs in India?

The Reserve Bank of India (RBI) is the primary regulatory authority that controls and supervises NBFCs in India. It issues guidelines, regulations, and directives to ensure the stability and integrity of the financial system.

Which is the Safest NBFC in India?

Respo Financial Services Limited is considered as one of the safest NBFCs in India as it follows RBI guidelines and their financial offerings

Which NBFC Has the Highest Interest?

NBFCs offer a range of interest rates based on the kind of financial product or loan. To choose the NBFC offering the best interest rate, it is currently necessary to evaluate the interest rates provided by various NBFCs. Get an urgent personal loan with NBFC approved loan app easily in just a few steps upto Rs 5 lakhs personal loan with reasonable interest rates by visiting zype’s official website.

Which Act is NBFC Under?

NBFCs operate under the regulatory framework provided by the Reserve Bank of India (RBI) Act, 1934, and are regulated by the Reserve Bank of India (RBI) through various guidelines, notifications, and directives issued from time to time.

When Did NBFC Start in India?

When NBFC were first established in India in the 1960s. The Reserve Bank of India (RBI) Act, 1934, standardized the legal framework for non-bank financial companies (NBFCs), formalizing the concept that had developed over time

How to Identify an NBFC company?

The Reserve Bank of India (RBI) registration status can be used to identify non-bank financial companies (NBFCs). On its official website, the RBI keeps track of NBFCs that have registered. Additionally, NBFCs usually mention their registration status in their official documents, website, and communication materials.


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