An Overview on Nbfc Sector in India

Non-Banking Financial Companies (NBFC) have rapidly emerged as an important element of the Indian financial system. Moreover, NBFCs assume significance in the tenuous business segment as they primarily cater to the conviction requirements of the unorganised sector such as wholesale & retail traders, small-scale industries and small borrowers at the local level. NBFC is a composite throng of financial institutions, performing a wide chuck of activities like hire-purchase finance, vehicle financing, equipment lease finance, personal loans, work capital loans, consumer loans, housing loans, loans against shares and investment, etc. NBFCs are broadly change integrity into three categories namely (i) NBFCs accepting deposits from banks (NBFC-D); (ii) NBFCs not accepting/ place public deposits (NBFC-ND); and (iii) core investment companies (i.e. those acquiring share/securities of their group/holding/subsidiary companies to the extent of not less than 90% of total assets and which do not accept public deposits.) The segment has witnessed considerable growth in the last a few(prenominal) days and is now being recognised as complementary to the banking sector due to implementation of innovative marketing strategies, introduction of betrothed products, customer-oriented services, attractive rates of return on deposits and simplified procedures, etc.

man the functions of NBFCs are just like banks, there are few differences between both the institutions. These are: (i) NBFC cannot accept demand deposits; (ii) NBFC is not part of the payment and settlement system as wellspring as it cannot issue cheques drawn on itself and (iii) deposit insurance facility of Deposit Insurance & Credit Guarantee passel is not available for NBFC depositors unlike in the case of banks. regulatory Framework The rbi Act was amended in 1997 to provide for all-inclusive regulatory framework for NBFCs. As per the RBI (Amendment) Act 1997, the RBI can issue directions to NBFCs & its auditors, prohibit deposit... If you want to get a full essay, order it on our website: Orderessay

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