TYPES OF NBFC

• Equipment Leasing Company

• Hire Purchase Company
• Loan Company
• Investment Company
With effect from December 6, 2006 the
NBFCs have been reclassified as
• ASSET FINANCE COMPANY (AFC): asset finance company
are the financial institutions carrying on its business mainly in
the financing of physical assets that correspond to productive/
economic activity for example- automobile, lathe
machines, tractors, generator system, earth moving and
material handling equipment moving on the power and general
purpose industrial machines.
• LOAN COMPANY: it includes a company which is not an asset
finance company but a financial institution principally engaged in the
business of lending funds (other than its own) by loans or advances,
or otherwise for any activity.

• INVESTMENT COMPANY: it consists of those companies or

institutions whose main business is to acquire and manage securities
for investment purposes.
• INFRASTRUCTURE FINANCE COMPANY: it is the kind of
financial institution principally engaged in providing infrastructure
loans.

• MUTUAL BENEFITS FINANCIAL COMPANY: mutual benefit

financial company refers to the financial institution which is
notified by the central government under the companies act, 2013
whose primary aim is to enable its members to pool their money
with a pre-calculated investment objectives. Its source of fund is
share capital, deposits from its members and the general public.
 WHAT ARE THE DIFFERENT TYPES/CATEGORIES OF
NBFCS REGISTERED WITH RBI?
• NBFCs are categorized

a) in terms of the type of liabilities into Deposit and Non-

Deposit accepting NBFCs,

b) non deposit taking NBFCs by their size into systemically

important and other non-deposit holding companies (NBFC-
NDSI and NBFC-ND)

c) by the kind of activity they conduct.

 Within this broad categorization the different types of
NBFCs are as follows:

• Asset Finance Company (AFC) : An AFC is a company which is a

financial institution carrying on as its principal business the financing
of physical assets supporting productive/economic activity, such as
automobiles, tractors, lathe machines, generator sets, earth moving
and material handling equipments, moving on own power and general
purpose industrial machines.
• Principal business for this purpose is defined as aggregate
of financing real/physical assets supporting economic
activity and income arising therefrom is not less than 60%
of its total assets and total income respectively

• UTI AMC, ICICI AMC, BIRLA SUN LIFE AMC are

few examples of asset management company
• Investment Company (IC) : IC means any company
which is a financial institution carrying on as its principal
business the acquisition of securities,

• Loan Company (LC): LC means any company which is a

financial institution carrying on as its principal business
the providing of finance whether by making loans or
advances or otherwise for any activity other than its own
but does not include an Asset Finance Company.
• Infrastructure Finance Company (IFC): IFC is a non-
banking finance company

a) which deploys at least 75 per cent of its total assets in

infrastructure loans,

b) has a minimum Net Owned Funds (paid up capital + free

reserve) of ₹ 300 crore,

c) has a minimum credit rating of ‘A ‘or equivalent

d) and a CRAR (Capital to Risk (Weighted) Assets Ratio/ Capital

Adequacy Ratio) of 15%.
• Infrastructure Debt Fund Non- Banking Financial
Company (IDF-NBFC) : IDF-NBFC is a company
registered as NBFC to facilitate the flow of long term debt
into infrastructure projects.

• IDF-NBFC raise resources through issue of Rupee or

Dollar denominated bonds of minimum 5 year maturity.
Only Infrastructure Finance Companies (IFC) can sponsor
IDF-NBFCs.
• Systemically Important Core Investment Company (CIC-
ND-SI): CIC-ND-SI is an NBFC carrying on the business of
acquisition of shares and securities which satisfies the conditions
stipulated by RBI

• Non-Banking Financial Company - Micro Finance

Institution (NBFC-MFI): NBFC-MFI is a non-deposit taking
NBFC having not less than 85% of its assets in the nature of
qualifying assets which satisfy the criteria of RBI
• Non-Banking Financial Company – Factors (NBFC-
Factors): NBFC-Factor is a non-deposit taking NBFC
engaged in the principal business of factoring. The financial
assets in the factoring business should constitute at least 50
percent of its total assets and its income derived from
factoring business should not be less than 50 percent of its
gross income.
• Mortgage Guarantee Companies (MGC) - MGC
are financial institutions for which at least 90% of the
business turnover is mortgage guarantee business or at
least 90% of the gross income is from mortgage
guarantee business and net owned fund is ₹ 100 crore.
• NBFC- Non-Operative Financial Holding Company
(NOFHC) is financial institution through which promoter
/ promoter groups will be permitted to set up a new bank .

• It’s a wholly-owned Non-Operative Financial Holding

Company (NOFHC) which will hold the bank as well as all
other financial services companies regulated by RBI or
other financial sector regulators, to the extent permissible
under the applicable regulatory prescriptions.
• The evolution of the NBFC sector has resulted in several categories of NBFCs
intended to focus on specific sector/ asset classes. At present there are twelve
broad categories of NBFC, based on the nature of activity, namely,

INVESTMENT LENDING OR SIMILAR

ACTIVITIES ACTIVITIES OTHER ACTIVITIES

Ø Loan Company

Ø Investment Company Ø Asset Finance Company

Ø Mortgage Guarantee
Ø Core Investment Ø Micro Finance Institution
Company
Company
Ø Infrastructure Finance Ø Peer-to-Peer Lending
Ø Non-Operative Company Platform
Financial Holding
Company Ø Infrastructure Debt Fund Ø Account Aggregator

Ø Factor