NBFC (Non Banking Financial Company)

 N.B.F.C





N.B.F.C  means Non Banking Financial Companies. N.B.F,C plays an important role in Economy of  India. It play Important role regarding lending in economy. After Bank N.B.F.C play important role in India.


What is an N.B.F.C?


N.B.F.C are financial institutions that perform banking function but don't have Banking License. 

It do the work of  banking like lending, etc.. N.B.F.C are supervised  by the R.B.I. with rules and regulation.


Key Function of N.B.F.C.


1) Providing Loans -  N.B.F.C Provide different loans like Gold Loan, Mortgage loan, secured and unsecured loan etc. It provides easily loan to individual and Business.


2) Wealth Management-  N.B.F.C  provide wealth management in the form of managing mutual fund, 

F.D. R.D, S.I.P etc.


3)Asset Loans- N.B.F.C provide loans like asset loan like Vehicle Loan, Gold Loan etc.


4)Microfinance-  Some N.B.F.C provide small loan to individual, small business,. It helps the underprivilege people to get loans.


5) Housing Finance- N.B.F.C also provide housing loans to individuals who don't get easily loan from

banks.


 Importance of N.B.F.C

1) Credit Accessibility - N.B.F.C provide easy credit to underprivilege individual and Small business. This individual do not get easily loan from bank.

2) financial service- N.B.F.C provide loans to rural area where formal banking is not available.

3) Diverse Product - N.B.F.C has different product like Gold Loans, unsecured Loans etc. it also gives F.D.s etc.

4) Economic Growth-  N.B.F.C helps in economy growth by providing credit to the needy people. Due to there micro level business they are able to reach even rural area.

5) Risk Mitigation - They diversify there investment and credit thus helping in risk factors.


Regulating Governing of N.B.F.C

They are regulated by R.B.I, They come directly under R.B.I rules and regulation. The R,B,I has set different rules for bank and .N.B.F.C. The N.B.F.C that manages share market are under S.E.B.I.


Problem faced by N,B,F,C

1) Regulatory Problem- They have to face strict guidelines from R.B.I unlike banks. They have face limitation in capital mobilization and lending.

2) Funding program - It is hard to get funding for N.B.F.C as they are not secured like banks. There F.D tenure is different than normal banks. It is hard to get funding during economy down turn , inflation.

3) Competition - They have to face huge competition from from Banks and there fellow N.B.F.C competition.


Conclusion

N.B.F.C play a important role in our economic growth. They provide loans to under previleges people. They have there Branches in rural area . we can't deny about there role in economic development of the country. Even through they have to face difficulty due to regulation . The government should encourage N.B.F.C for their role in economy by reducing the restriction



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