General Knowledge

Based on Liability NBFCs are divided into 2 categories as follows

  • Category A – NBFCs accepting public deposits (NBFCs-D)
  • Category B – NBFCs not accepting public deposits (NBFCs-ND)

 NBFCs operating in India fall under the following categories based on their businesses

  • Hire Purchase Finance Company – a company which carries on hire purchase transactions as its principle business where loans for purchase of goods and services are provided under an installment plan
  • Housing Finance Company – a company which provides finance for acquisition of houses and plots. It also helps in construction of houses and development of plots
  • Investment Company – a company which carries out acquisition of securities as its principle business. They provide finance mainly to companies associated with business organizations
  • Loan Company – a small partnership company which obtain funds in the form of deposits from the public and give loans to wholesale, retail traders, small scale industries and self-employed individuals
  • Equipment Leasing company – a company which lease out equipments or provide finaces for leasing business. They raise fund from other companies, banks and the financial institutions in addition to their NOF
  • Mutual Benefit Finance Company – any company that comes under the Section 620A of the Companies Act 1956. The main source of funds are share capital and deposits from their members and public
  • Chit Fund Company – a company which collects subscriptions from the public periodically and in turn distributes the same as prizes back to them. These companies are  governed by Chit Fund Act 1982