Definition: The Non-Banking Financial Company: Micro Finance Institution (NBFC-MFI) is a non-deposit taking financial company that has minimum 85% of its assets in the nature of qualifying assets. The Qualifying Assets are those assets which have a substantial period of time to be ready for its intended use or sale. As per RBI, for a non-banking financial company to be … [Read more...] about Non-Banking Financial Company-Micro Finance Institution
Infrastructure Debt Fund Non-Banking Financial Companies
Definition: The Infrastructure Debt Fund Non-Banking Financial Companies or IDF-NBFC are yet another non-deposit accepting financial institutions that purely deals in infusing long-term debt into the infrastructure sector. The debt fund means a pool of investment that holds the array fixed-income instruments such as bonds or debentures. As per RBI, the company shall be … [Read more...] about Infrastructure Debt Fund Non-Banking Financial Companies
Infrastructure Finance Company
Definition: The Infrastructure Finance Company 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 companies to the borrowers in the specific infrastructure sectors Viz. Transport, Energy, Water and Sanitation, Communication, and Social and … [Read more...] about Infrastructure Finance Company
Asset Finance Company
Definition: The Asset Finance Company is the financial institution engaged in the principal business of financing physical assets that correspond to productive/economic activity such as machinery, automobile, tractors, material handling equipment, power generators, etc. The Asset Financing refers to the act of pledging company’s assets Viz. Bills Receivables, short-term … [Read more...] about Asset Finance Company
Loan Company
Definition: The Loan Company is a financial institution principally engaged in the business of providing finance to the public, whether by making loans or advances or otherwise, for any activity other than its own (Excludes equipment leasing and hire-purchase activities). The loan is a kind of an agreement wherein the lender temporarily lends property, usually cash to the … [Read more...] about Loan Company
Hire-purchase Company
Definition: The Hire-Purchase Company is yet another non-banking finance company that principally deals in the business of hire-purchase transactions and the financing of such activities. The Hire-Purchase means buying the goods on an installment plan. This means the hirer can buy commodities in exchange for the regular installment payments (principal amount+ interest) over … [Read more...] about Hire-purchase Company
Equipment Leasing Company
Definition: The Equipment Leasing Company is a non-banking finance company which is primarily engaged in the business of leasing of equipment or financing of such activity. The term “lease” refers to the contractual agreement between the lessor (owner) and the lessee (hirer) wherein the lessor grants right to the lessee to use the equipment in exchange for the periodical … [Read more...] about Equipment Leasing Company
Investment Companies
Definition: The Investment Companies are the non-finance banking companies that are primarily engaged in the business of buying and selling of securities. Simply, a company that pools the resources of investors to reinvest it in the marketable securities ranging from shares to debentures to money market instruments are called the investment companies. The investment … [Read more...] about Investment Companies
Mutual Benefit Finance Companies
Definition: The Mutual Benefit Finance Companies also called as "Nidhis", are the non-banking finance companies that enable its members to pool their money with a predetermined investment objective. The main sources of funds are share capital, deposits from its members, deposits from the general public. In other words, any company which has been notified by the Central … [Read more...] about Mutual Benefit Finance Companies
Non-Banking Financial Companies (NBFCs)
Definition: The Non-Banking Financial Companies (NBFCs) are the financial institutions that offer the banking services, but does not comply with the legal definition of a bank, i.e. it does not hold a bank license. The non-banking financial companies are registered under the Companies Act, 1956 and deals in the business of loans and advances, investments in … [Read more...] about Non-Banking Financial Companies (NBFCs)