Published on Feb 2, 2023Updated on Jul 17, 2023
Non-Banking Financial Corporations (NBFCs) are a crucial component of the Indian financial ecosystem, providing a wide range of financial services to individuals, small-scale businesses, startups, and so on. These institutions play a vital role in providing credit and other financial services, such as loans, retirement planning, money markets, underwriting, and merger operations, to small businesses and local borrowers.
In times of economic stress, NBFCs have also been essential in managing risks and mitigating their impact, and they are increasingly recognized as a valuable complement to traditional lending institutions. They are categorized into different types based on the type of services and business model they offer. Some of the examples are Deposits accepting NBFCs, Asset Finance NBFCs, Infrastructure Finance NBFCs and many more.
An NBFC is a business that is registered under the Companies Act of 2013 and engages in lending, hire-purchase, leasing, insurance, and, in some situations, the receipt of deposits, as well as the acquisition of stocks, shares, and chit funds. The Reserve Bank of India and the Ministry of Corporate Affairs jointly oversee the NBFCs' operations.
By offering loans at competitive rates, NBFCs are playing a crucial role in the current financial landscape. New credit disbursal procedures for micro, small, and medium enterprises have also been implemented by the NBFC sector. This has a significant impact on the Indian economy and financial system as a whole.
You can also turn to an NBFC if you are an individual looking for a personal loan. This money can be used for any application. For example, a personal loan for meeting urgent expenses, renovating your home, etc.
Based on their activity, the deposits they hold, and the different types of loans they give, NBFCs can be divided into different categories. Let's explore five of them:
Infrastructure Finance Company - Infrastructure finance companies are loan companies that do not accept deposits and have at least 75% of their total assets allocated to infrastructure loans. Additionally, infrastructure finance businesses must have a minimum net worth of INR 300 crore, CRAR of 15%, Tier-I capital of 10%, and a minimum credit rating of A from CRISIL, FITCH, CARE, ICRA, BRICKWORK, or an equivalent rating from any other certifying rating organisations. These businesses offer loans for the construction of infrastructure for projects including energy, transportation, communication, water, and sanitation, as well as other forms of social and economic infrastructure.
SMFG India Credit is a leading non-banking financial company offering a wide range of financial products and solutions to its customers at affordable rates and flexible repayment terms. You can opt for a bike loan, vacation loan, business loan, personal loan, property loan, and even a wedding loan under our NBFC at affordable interest rates and comfortable repayment tenures.
Visit our website to learn more about our financial solutions and apply right away.
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