NBFC — Non-Banking Financial Companies: Complete 101 Guide
Last updated: March 2026
What is an NBFC?
NBFCs (Non-Banking Financial Companies) are financial institutions that provide banking-like services without holding a banking license. They play a crucial role in financial inclusion.
Types of NBFCs
| Category | Activities |
|---|---|
| Asset Finance | Vehicle, equipment loans |
| Loan Company | Personal, business loans |
| Investment | Securities, mutual funds |
| Infrastructure Finance | Project loans |
| Microfinance | Small business loans |
How NBFCs Work
Registration
- Minimum ₹2 crore capital (some categories)
- RBI registration mandatory
- Compliance with RBI directives
Lending Process
- Customer application
- Credit assessment
- Risk-based pricing
- Loan disbursement
- Repayment collection
NBFC vs Banks
| Feature | NBFC | Bank |
|---|---|---|
| Acceptance of deposits | Limited | Full |
| RBI regulation | Yes | Yes |
| Credit creation | Yes | Yes |
| Deposit insurance | No | Yes ( DICGC) |
Consumer Rights
- Transparent interest rates
- Fair practices code compliance
- Grievance redressal mechanism
- Credit information accuracy
- No hidden charges disclosure