NBFC Abbreviation

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Popular abbreviations of NBFC:

Searching for NBFC abbreviation / NBFC full form leads to different results in different categories. The below table illustrates the popular acronyms among them.

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What does NBFC mean?

NBFC stands for Non-Banking Financial Company. These are the financial institutions engaged in the business of loans and advances, acquisition of bonds, stocks, shares, insurance or chit-fund business. Registered under the Companies Act, 2013, these companies do not have a banking license. Their goal is to facilitate bank-related financial services and are regulated by the Reserve Bank of India.

NBFCs do not include the companies with a principal business of agriculture, sale purchase of goods or any industrial activity. Because banks can’t reach out to every sector of financial activities, NBFCs play a crucial role in the financial industry.

Importance of NBFCs in the Economy

The presence of NBFCs is very profitable for any economy and their proper functioning would only boost the strength of the economy. As said by an ex-Executive Director of RBI, NBFCs are crucial because:

• The huge size of the NBFC sector – despite the slowdown in the economy, NBFC has constantly grown in the previous years
• Highly profitable – Since they involve lower costs than banks, they are usually more profitable. They lend money to people at lower interest rates and thus increase their growth.
• Significant growth – The NBFC sector grew by 22% on an average every year which indicates their growing impact on the economy.
• Higher focus on infrastructure lending – in a country like India, infrastructure continuously keeps growing. It is a risky sector and involves profits over a larger time frame. NBFC contributes more to infrastructural lending as compared to banks.
• Providing long term credits
• More employment – A huge sector such as NBFCs employs thousands of people across the country.
• Working hand-in-hand – The thing to be kept in mind is that NBFCs are there to help the banks since banks cannot reach every sector. Thus, NBFCs release pressure off the banking system.
• Prominent NBFCs in India
• Due to the vastness of India’s financial sectors, numerous NBFCs have come up with time. Some of the most prominent ones across the country are:
• Power Finance Corporation Limited
• Bajaj Finance Limited
• Shriram Transport Finance Company Limited
• Mahindra & Mahindra Financial Services Limited
• Muthoot Finance Limited
• HDB Finance Services
• Tata Capital Financial Services Limited
• Aditya Birla Finance Limited