A non-banking financial company is an NBFC. The term "NBFC" refers to financial institutions that offer loans for vehicles, homes, machinery, aircraft, and occasionally even mobile phones. It also refers to huge stock brokerage firms.
Under Section 451(c) of the RBI Act, a non-banking company that does the business of a financial institution is referred to as an NBFC.
In other words, without providing standard banking facilities, NBFC registration offers you a wide range of specialized financial services. India is the only nation in the world to grant licenses to financial institutions for 10 different types of NBFC.
Process of Incorporating NBFC
Below is discussed the step-by-step procedure for forming a Non-Banking Financial Corporation (NBFC):
-
The business must be legally registered by either the Companies Act of 1956 or the Companies Act of 2013.
-
The business should have at least Rs. 2 crores in net-owned funds.
-
A Senior Banker or someone with a similar background must make up at least one of the Directors. Additionally, this director must serve as a full-time director for the business.
-
The company should have a clean CIBIL record.
-
Once the above requirements have been fulfilled, the applicant may submit an application for incorporation on the Reserve Bank of India website.
-
Through the RBI website, a form must be filled out and submitted.
-
The applicant must upload the necessary papers on the web portal together with the application form.
-
A CARN number will be generated once all of the above procedures have been carried out.
-
A hard copy of the application that is completed and submitted via the site must also be sent by the applicant to a Reserve Bank of India regional branch office.
-
After a careful review of the application, the firm will receive the license.
NBFCs in India
There are many NBFCs working in our nation, some of the well-known NBFCs are mentioned below:
Kinara Capital Private Limited
Kinara Capital, an RBI-registered Systemically Important NBFC, offers Collateral-free Business Loans ranging from Rs. 1 lakh to Rs. 30 lakhs, tailored for MSMEs. Customers can benefit from 24-hour loan disbursement and doorstep customer service. Founded in 2011, Kinara is known for its extensive field network, serving clients in seven languages: English, Hindi, Tamil, Kannada, Telugu, Gujarati, and Marathi. Kinara offers a range of financial solutions, including working capital loans and machinery purchase loans, tailored to meet the needs of small business owners. Kinara’s HerVikas Loans will automatically provide qualifying women entrepreneurs with 1% interest rate discount on Collateral-free Business Loans. Kinara Capital has disbursed over Rs. 7000 crores in loans, driving growth and supporting businesses across 4500+ pincodes.
Power Finance Corporation Limited
Power Finance Corporation Limited, a Navratna Status corporation, was established in 1986. The company's chairman and managing director are Rajeev Sharma. The nation's many power projects are known to receive financial support from Power Finance Corporation Limited. It helps businesses engage in the production, transmission, and distribution of electricity. Additionally, the business is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
Bajaj Finance Limited
Founded in 2007, Bajaj Finserv is a division of Bajaj Holdings and Investments. It is a very well-known financial organization that offers loans to doctors for career education, house loans, gold loans, individual loans, business loans, and loans to entrepreneurs. In addition to this, Bajaj Finserv also offers general insurance, loan, and wealth advisory services. With more than 20000 workers, it operates more than 1400 branches around the nation.
Mahindra & Mahindra Financial Services Limited
Established in 1991, Mahindra & Mahindra Financial Services Limited (MMFSL) has more than 1000 offices nationwide and more than 3 million customers. One of the most well-known organizations, MMFSL has two affiliates that provide financial and insurance services for rural homes. Additionally, it specializes in providing cash advances for gold, cars, businesses, homes, working capital, and much more.
Shriram Transport Finance Company Limited
Along with other things, Shriram Transport Finance Company Limited concentrates on financing commercial and business vehicles. Since its inception in 1979, the firm has provided financial services for light-duty trucks, heavy-duty trucks, mini trucks, passenger cars, construction vehicles, and farm machinery. General insurance, mutual funds, common assets, stock broking, and general protection are the fields of expertise for the organization.
HDB Finance Services
HDB Financial Services is operated by India’s largest private-sector HDFC Bank. Through a network of more than 1,000 branches spread over 22 Indian states and 3 Union Territories, it provides a range of secured and unsecured financial loans. It offers both secured and unsecured loans, including personal and business loans, loans for doctors, auto loans, gold loans, loans for people just starting out with credit, loans for small businesses, loans for consumer durables, loans for construction equipment, loans for new and used cars, loans for equipment, and loans for tractors. The business is divided into categories for lending business and BPO services. It is now thought to be India's fastest-growing NBFC.
Muthoot Finance Ltd
India's first NBFC, Muthoot Finance Ltd, dates back to 1888 when it started as a small lender operating out of a village in Kerala. Muthoot Finance Ltd. exclusively authorizes loans in exchange for promises of jewelry. It dominates the market for gold loans and financing in India. Muthoot Finance Ltd also provides services for money transfers, asset management, travel, and tourism in addition to funding gold transactions. Additionally, gold coins are offered at Muthoot Finance locations. Over 4,400 branches are currently in operation in India, where the organization is headquartered. Additionally, it is the parent organization of the home loan provider Muthoot Housing Finance (India) Ltd.
Aditya Birla Finance Ltd.
Aditya Birla Finance Limited, a division of Aditya Birla Financial Services, was established in 1991 and holds an NBFC certification for ISO 9001:2008. ABFL is one of India's top five largest private diversified NBFCs and is recognized by the RBI as a "systemically important non-deposit taking NBFC." It provides accurate and unique solutions in a variety of areas, including capital markets, structured finance, commercial mortgages, and corporate financing.
Tata Capital Financial Services Ltd
Tata Capital Financial Services Ltd. Is one of the top NBFCs in India. It was founded in 2007 and is a division of Tata Sons Limited. One-stop financial service provider TCFS describes itself as meeting the various requirements of retail, corporate, and institutional consumers across industries. As a "Systemically Important Non-Deposit Accepting Non-Banking Financial Company (NBFC)," it is registered with the RBI. Commercial finance, infrastructure financing, wealth management, consumer loans, and distribution and marketing of Tata Cards are just a few of the many products that TCFS provides to people, families, and enterprises.
Cholamandalam
The financial services division of the Murugappa Group was established in 1978 as Cholamandalam Investment and Finance Company Limited (Chola). Chola began as an equipment financing business before advancing to become a full-service provider of financial services, providing clients with a wide range of services and products including vehicle financing, home loans, home equity loans, SME loans, investment advisory services, stockbroking, and a host of other financial services. With more than INR 35,000 Crore in assets under control, Chola has 725 offices across India.
L & T Finance Limited
L & T Finance Limited, which was founded in 1994, is a significant player in the non-banking financial industry. L & T, which has its headquarters in Mumbai, provides financial services to a variety of industries, including commerce, industry, agriculture, commercial vehicle loans, personal vehicle loans, corporate loans, and rural loans. The business serves more than 10 lakh customers.
