Non-banking financial company is an obscure term for many people. Let’s understand what a non-bank financial company in detail is and understand functions associated with it. Non-bank financial companies (NBFCs) are referred as the fiscal organizations which grant banking services but nowhere acts like an authorized bank. NBFCs do not possess a banking certificate. Still, it processes and practices are implemented as per the bank bylaw. Hence, NBFCs practices as a bank with no bank regulation. Nonetheless, this relies on the authority, for instance in New Zealand, any corporation can carry out the trade of banking, and requires no banking certificates.
NBFCs offer various types of services which may be financially useful. Non-bank organizations often operate as loan brokers and credit services and helps investments in assets and belongings. NBFCs deals in capital market instruments and finances private edification. It also helps in assets administration such as handling portfolios of stocks and shares and covering stock and shares, and other responsibilities and retirement planning. NBFCs suggest corporations in union and achievement organize feasibility, studies market or industry for companies and reducing services such as cut rate of instruments.
On the other hand, NBFCs are characteristically not permitted to acquire down payments from the common people. Hence they are required to stumble on different ways of financial supporting their processes, for instance supplying liability instruments.
A non- banking investment corporation can be categorized into the following groups depending upon their characteristic of actions which are development investment organizations, rental corporations, investment business, modaraba companies, house business companies, venture capital companies, and discount & assurance addresses.