NBFC Full Form | What Does NBFC Stand For?

NBFC: Non-Banking Financial Companies

NBFC Full Form

NBFC full form stands for Non-Banking Financial Companies. NBFC is a company registered under the Companies Act 2013 of India, which deals in loans and advances in shares, stocks, bonds, rent-purchase insurance business, or chit fund business.

NBFC Full Form

NBFCs provide banking services without a banking license or without meeting the legal definition of a bank. Any entity whose primary business is agriculture, industrial activity, purchase, or sale of any goods (other than securities) or provide any service or sale, purchase/manufacture of immovable property.

Brief History

  • The Reserve Bank of India Act, 1934 was amended on 1 December 1964 by the Reserve Bank Amendment Act, 1963.
  • In the early 1970s, the Government of India asked the Banking Commission to investigate the activities of non-banking financial intermediaries.
  • In 1972, the Banking Commission recommended uniform chit fund legislation across the country.
  • In December 1982, RBI Governor Dr. Manmohan Singh wrote ‘Professor Sukhme Chakraborty’ to review the functioning of the financial system in India.
  • The committee recommended an assessment of the linkages between the banking sector, and non-banking financial institutions in order to review the credit policy instruments in terms of their impact on the system.
  • In 1992, the number of NBFCs increased from 7,000 to 30,000.

Examples of NBFC

NBFCs provide banking services without a banking license or without meeting the legal definition of a bank.

  • Insurance companies are regulated by IRDA
  • Merchant banking companies, stockbroking companies, venture capital funds managed by CEB
  • Housing finance companies, regulated by the NHB (National Housing Bank).
  • Chit fund companies regulated by the State Government

What Is The Full Form Of NBFC?

NBFC full form stands for Non-Banking Financial Companies. It was amended on 1 December 1964. NBFCs provide banking services without a banking license or without meeting the legal definition of a bank.

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