Non-Banking Finance Companies are involved that lend to borrowers to help the Indian economy. These businesses are critical in developing nations like ours, where the bulk of the population is from rural areas. In this article, we will study the benefits of NBFCs in depth.
What is NBFC Registration and what does it do?
NBFC is an abbreviation for Non-Banking Finance Company, which is a financial services firm. Loans and advances, acquisition of stocks, shares, debt, and so on, chit funds, and leasing are among their operations. Chit funds, pawnshops, cashier's cheque issuers, cheque crashing locations, payday lending, currency exchanges, and microloan providers are examples of these businesses. The Companies Act of 2013 requires NBFCs to be registered.
Restrictions on NBFC Registration
Although NBFCs operate mostly or almost entirely like commercial banks, they are subject to various restrictions imposed by the RBI. These constraints are as follows:
The NBFC cannot receive demand deposits from any source or method.
The depositor does not benefit from services such as the deposit insurance system.
They are unable to issue a check drawn on themselves.
They are not permitted to participate in the payments system.
There are 10 types of NBFCs classified under these two basic categories:
Asset Finance Company (AFC): AFCs operate to finance economic operations such as autos, tractors, lathe machines, generator sets, earth moving, and so on.
Investment Company (IC): Any corporation whose major activity is the acquisition of securities.
Loan Company LC: These firms primarily/primarily make loans and advances for various reasons rather than as assets.
The government has amalgamated the above-mentioned three groups, which are now known as NBFC ICC (Investment and credit Company).
Disclaimer
The NBFC is a form of firm that operates similarly to a commercial bank, with the exception of several restrictions imposed by the RBI Act of 1934. Furthermore, some businesses lack a banking licence. The main benefit of these firms is that they provide a means of obtaining money in situations where traditional banks are unavailable. Other benefits include the fact that they fund private education, invest in money market instruments, and provide loans and credit facilities, among other things. For NBFC registration service kindly reach out to us muds.co.in

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