Non-banking financial company

From Free net encyclopedia

Non-bank financial companies (NBFCs) also known as a non-bank or a non-bank bank, are financial institutions that provide banking services without meeting the legal definition of a bank, i. e. one that does not hold a banking license. Operations are, regardless of this, still exercised under bank regulation. However this depends on the jurisdiction, as in some jurisdictions, such as New Zealand, any company can do the business of banking, and there are no banking licences issued.

Non-bank institutions frequently acts as suppliers of loans and credit facilities, however they are typically not allowed to take deposits from the general public and have to find other means of funding their operations such as issuing debt instruments. In India, most NBFCs raise capital through Chit Funds.