Non-Banking Financial Companies (NBFCs)
- A NBFC is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by the Government or local authority, or other marketable securities.
- The workings and operations of NBFCs are regulated by the RBI within the framework of the RBI Act, of 1934.
- The repayment of deposits by NBFCs is not guaranteed by the Reserve Bank of India.
- NBFCs are allowed to accept/renew public deposits for a minimum period of 12 months and a maximum period of 60 months.
- Activities Not Allowed:
- NBFC cannot accept demand deposits.
- NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on themselves.
- The deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs.