What is a Non-Banking Financial Company (NBFC)

A Non-Bank­ing Finan­cial Com­pa­ny (NBFC) is a com­pa­ny reg­is­tered under the Com­pa­nies Act, 1956 engaged in the busi­ness of loans and advances, acqui­si­tion of shares/stocks/bonds/debentures/securities issued by Gov­ern­ment or local author­i­ty or oth­er mar­ketable secu­ri­ties of a like nature, leas­ing, hire-pur­chase, insur­ance busi­ness, chit busi­ness but does not include any insti­tu­tion whose prin­ci­pal busi­ness is that of agri­cul­ture activ­i­ty, indus­tri­al activ­i­ty, pur­chase or sale of any goods (oth­er than secu­ri­ties) or pro­vid­ing any ser­vices and sale/purchase/construction of immov­able prop­er­ty. A non-bank­ing insti­tu­tion which is a com­pa­ny and has prin­ci­pal busi­ness of receiv­ing deposits under any scheme or arrange­ment in one lump sum or in install­ments by way of con­tri­bu­tions or in any oth­er man­ner, is also a non-bank­ing finan­cial com­pa­ny (Resid­uary non-bank­ing company).