Drawbacks of NBFC

What is the Full Form of NBFC?

The full form of NBFC is Non-Banking Financial Company. NBFCs are part of India’s financial landscape provide different financial needs and contribute to the country’s economic development. It is a financial institution that provides banking services like loans, advances, asset financing, and investments but it does not hold a banking license....

History of NBFCs

NBFCs first emerged in India during the 1960s and in the early 1970s, in the beginning, they started as deposit lending and taking institutions and were not permitted to conduct traditional banking activities like accepting demand deposits after that Reserve Bank of India (RBI) began regulating NBFCs to make sure the stability of the financial system....

Services of NBFC

There are 8types of NBFC, They are:...

Requirements for NBFC

In order to get the requirements of the Section 45 IA of the RBI Act 1934 that a corporation integrated under the companies Act of 1956 and ready to launch a non-banking organization business is required the following conditions:...

Examples of NBFCs in India

Housing Development Finance Corporation Limited (HDFC): it is a prominent Housing Finance Company in India that provides home loans and other related financial services. Bajaj Finance Limited: it is a NBFC offers consumer finance, personal loans and many more....

Drawbacks of NBFC

They are not subjected to the same regulations as banks. They may not offer good level of protection for your loan. They cannot accept demand deposits from public. There is a risk of improper financial stability. They charge high interest rates on loans compared to banks. They give limited access to payment services. They have limited branch network compared to bank....

Summary – NBFC Full Form

Non-Banking Financial Companies (NBFCs) are financial institutions that provide various services like lending, investing, and asset management without holding a full banking license. They emerged in India during the 1960s and have since expanded their services, filling gaps in the financial sector and supporting economic growth. NBFCs offer different types of services, including housing finance, microfinance, and infrastructure financing. However, they are not subject to the same regulations as banks and may charge higher interest rates on loans. Despite drawbacks like limited branch networks and regulatory differences, NBFCs play a vital role in meeting the financial needs of individuals and businesses in India....

FAQs on NBFC Full Form

What is NBFC Full Form?...