1. NBFCs

2. 1. What is NBFCs?- Pamul Thakur
2. Assets Finance Company- Shilpa Elumalai
3. Investment Company- Parul
4. Loan Company- Sandeep Kaur
5. Infrastructure Finance Company- Sangi
6. Infrastructure Debt Fund- Mohini
7. NBFC-Factor- Pritika Jain
8. Gold Loans NBFCs – Pujan Goel
9. Residuary Non-profit Banking Companies-
Sparshi Gupta
10. Difference between NBFCs & Banks- Dheeraj

3. The Reserve Bank of India Act, 1934
amended on 1 December 1964 by
Reserve Bank Amendment Act, 1963.
In this new 'Chapter III-B' introduced
to Regulate 'Deposit Accepting'
NBFCs
Non-banking financial companies, or
NBFCs, are financial institutions that
provide certain types of banking
services, but do not hold a banking
license. Generally, these institutions are
not allowed to take deposits from the
public, which keeps them outside the
scope of traditional oversight
required under banking regulation.
NBFCs can offer banking services such
as loans and credit facilities, retirement
planning, money markets, underwriting,
and merger activities.

4. Top 5 NBFCs’ Ranking Based on Annual Turnover*
NBFCs List Total Income (Rs Mn) Rank
Power Finance
Corporation Limited
270185.70 1
Rural Electrification
Corporation Limited
240953.50 2
Shriram Transport
Finance Company
Limited
108306.10
3
Bajaj Finance Limited
100033.10
4
Indian Railway
Finance Corporation
Limited
90476.60 5

5. A financial institution carrying its principal
business of financing physical assets that
supports productive/economic activity.
 Automobiles
 Tractors
 Lathe machines
 Generator Sets
 Earth moving
 Material Handling Equipment
 General purpose industrial machines

6. There are at least three types of
investment companies (In US
securities law)
• Open-End Management
Investment Companies
(mutual funds)
• Closed-End Management
Investment Companies
(closed-end funds)
• UITs (Unit Investment Trusts)

8. The IFC is yet another financial institution engaged in the
principal business of infrastructure loan. The credit facility
(term loans, project loans, etc.) granted by the non-banking
financial to the companies borrowers in the specific
infrastructure sectors Viz. Transport, Energy, Water and
Sanitation, Communication, and Social and Commercial
Infrastructure are called as the Infrastructure Loan.
As per RBI, Non-banking Financial Company
must comply with the following conditions:
• Minimum, 75% of the total assets of the
company, should be deployed in the
infrastructure loans.
• The company must have a minimum net
worth of Rs 300 Crore.
• The capital to risk weighted asset ratio or
CRAR of the company should be at 15%
with Tier-I capital at 10%.
• The company should have a minimum
credit rating of “A” or equivalent of CRISL,
or equivalent to any other accrediting rating
agencies.

9. An IDF-NBFC is a company
and comes under the
regulation of RBI. IDF-
NBFCs would take over
loans extended to
infrastructure projects which
are created through the
Public Private
Partnership(PPP) route and
have successfully completed
one year of commercial
production.

10. Factor means a non-banking
financial company fulfilling the
Principal business criteria i.e.
whose financial assets in the
factoring business constitute at
least 75 percent of its total
assets and income derived
from factoring business is not
less than 75% of its gross
income, has Net owned Funds
of Rs. 5 Crore and has been
granted a certificate of
registration by RBI under
section 3 of the Factoring
Regulation Act, 2011.
Entry Point Norms for NBFC-factor
Every company registered under Section 3
of the Companies Act 1956 seeking
registration as NBFC-Factor shall have a
minimum Net Owned Fund (NOF) of Rs. 5
crore. Existing companies seeking
registration as NBFC- Factor but do not
fulfill the NOF criterion of Rs 5 crore may
approach the bank for time to comply with
the requirement.

11. Gold Loan is sanctioned by
accepting the gold ornaments of
the customer as pledge.
Personal loan is sanctioned on
the basis of source of income
and repayment capacity of an
applicant.
There are many NBFCs offering gold
loans in India, about 95% of the gold
loan business is handled by three
Kerala based companies i.e. Muthoot
Finance, Manapuram Finance And
Muthoot Fincorp.

12. The Residuary Non-Banking
Company is yet another form of
a financial institution engaged in
the principal business of
accepting deposits, under any
scheme or arrangement or in any
other form and not being asset
financing, investment, loan
company.
According to the Miscellaneous Non-
Banking Companies (Reserve Bank)
Directions, 1977 is not:
• A hire-purchase company
• A housing finance company
• An equipment leasing company
• A mutual benefit company
• A loan company
• An investment company
• An insurance company
• A mutual benefit financial
company
• A miscellaneous non-banking
company

13.  NBFCs perform functions similar to that of banks but there are a few
differences-
 Provides Banking services to People without holding a Bank license,
 An NBFC cannot accept Demand Deposits,
 An NBFC is not a part of the payment and settlement system and as
such,
 An NBFC cannot issue Cheques drawn on itself, and
 An NBFC is not required to maintain Reserve Ratios (CRR, SLR etc.)
 An NBFC cannot indulge Primarily in Agricultural, Industrial Activity,
Sale-Purchase, Construction of Immovable Property
 Foreign Investment allowed up to 100%.

14. Thank You