Types of Non Banking Financial Companies (NBFC) | lopol.org

Types of Non Banking Financial Companies (NBFC)

Non Banking Financial Companies (NBFC) are mainly classified into 4 types in which first will be general NBFC, secondly, Mutual Benefit Financial Company, then third, Mutual Benefit Company and finally the forth is Miscellaneous Non Banking Company.

Types of Non Banking Financial Entities

1. Non Banking Financial Company (NBFC)

  1. Equipment Leasing Company (ELC)
  2. Hire Purchase Finance Company(HPFC)
  3. Loan Company (LC): Providing finance by making loans or advances, or otherwise for any activity other than its own. Function excludes ELC/ HPFC/ Housing Finance Companies (HFC).
  4. Investment Company (IC) including primary dealers (PD): Acquisition of securities including Primary Dealers (PDs) who deal in underwriting and market making for government securities.
  5. Residuary Non Banking Company (RNBC): Company which receives deposits under any scheme or arrangement by whatever name called, in one lump-sum or in installments by way of contributions or subscriptions or by sale of units or certificates or other instruments, or in any manner. These companies do not belong to any of the categories as stated above.

2. Mutual Benefit Financial Company (MBFC) or Nidhi Company

Any company which is notified by the Central Government as a Nidhi Company under section 620A of the Companies Act, 1956 (1 of 1956).

3. Mutual Benefit Company (MBC) or Potential Nidhi Company

A company which is working on the lines of a Nidhi company but has not yet been so declared by the Central Government, has minimum net owned fund (NOF) of Rs.10 lakhs, has applied to the RBI for CoR and also to Department of Company Affairs (DCA) for being notified as Nidhi company and has not contravened directions/ regulations of RBI/ DCA.

4. Miscellaneous Non Banking Company (MNBC) or Chit Fund Company

Managing, conducting or supervising as a promoter, foreman or  agent of any transaction or arrangement by which the company enters into an agreement with a specified number of subscribers  that every one of them shall subscribe a certain sum in installments over a definite period and that every one of such subscribers shall in turn, as determined by tender or in such manner as may be provided for in the arrangement, be entitled to the prize amount.

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