What is the Full Form of NBFC?

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The full form of NBFC is Non-Banking Financial Companies. These companies are asset institutions that provide financial services as a means of expanding access to finances. Unlike banks, NBFC’s are not restricted by rigid regulations. Read this blog if you want to find out more about Non-Banking Financial Companies. 

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About NBFC

Banks are the backbone of traditional financial services however, NBFC’s, as they are not restricted to regulations, can venture into underserved segments like small businesses, micro-entrepreneurs, and rural areas. Moreover, NBFC’s have various focus areas like personal loans, consumer finance, vehicle loans, etc. Some also focus on specific industries, like infrastructure or healthcare. 

Although the main strength of NBFCs is lending, they offer a wide range of services like investment companies that manage mutual funds and wealth portfolios, insurance companies, chit funds and even currency exchange.  

NBFC’s Certification 

NBFCs require certification by the Reserve Bank of India. According to Section 3 of the Companies Act, of 1956, the company should be reported.  Moreover, the company should own a  minimum net fund of Rs. 2 crores. The criteria for a minimum net-owned fund can differ according to the specific NBFCs.

Also Read: What is the Full Form of AMFI?

Difference between NBFC and Banks

The banks have a more bureaucratic machinery as compared to that of the NBFCs. NBFCs are often quicker to adapt and innovate. They are open to adopting new technologies like mobile banking and AI. This helps them to respond to the changing market dynamics and offer quick loan approvals.

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We hope this blog has helped you understand the full form of NBFC and everything related to it. If you want to know more, find the 300+ full forms list on our blog. In the world of short forms, you can rely on the Leverage edu page to know about more full forms like this! Connect with us study abroad experts to achieve your international dream today!

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