NON BANKING
FINANCIAL COMPANIES
Presented byKARISHMA
GRISHMA
MANSI
ARCHANA
ABHIMANYU
VISHNU
WHAT IS NBFC?
A non-banking financial company (NBFC) is a
company registered under the Companies Act,
1956 and is engaged in the business of
Loans and advances.
Indian financial system has large number of privately
owned, decentralized and small size financial institution
known as non banking financial companies.
In Indian financial system NBFC plays very important
role in converting services and provide credit to the
unorganized sector and small borrowers.
A non banking institution, which is a company and which
and which has its principal business the receiving of deposits
under any scheme or lending in any manner.
The NBFCs which are registered with RBI are :
Equipment
Leasing
Investmen
t
companies
Hire
purchase
Loan
companie
s
With effect from Dec 6,2006 the above NBFCs
registered with RBI are :
Asset
finance
companies
Investment
companies
Loan
companies
Role of NBFC
Promoters Utilization of savings
Provides easy timely and unusual credit
Financial supermarket
Providing housing finance
Investing Funds in Productive Purposes
Difference between Commercial banks and
NBFCs
COMMERCIAL BANKS
NBFCs
Issue of cheques:
In case of NBFCs theres no facility
In case of commercial banks,
to issue cheques against bank
cheque can be issued against bank deposits
deposits.
Rate of interest:
Commercial banks offers lesser
rate of interest on deposits and
charge less rate of interest on
loans as compared to NBFCs.
NBFCs offers higher rate of interest
on deposits and charge higher rate
of interest on loans as compared to
commercial banks.
Law which Governs them:
Commercial banks are regulated
by banking regulation act 1949
and RBI
NBFCs are regulated by different
regulation such as SEBI,companies
act, National housing bank,Unit
fund act and rbi.
Types of assets:
Commercial bank hold vareity of
assets in the forms of loans,cash
credit,Bills of exchange,overdraft
NBFCs specialize in one types of
asset for eg Hire purchases
companies specialize in consumer
loans while housing finance
Receivin
g of
benefits
Functions
of NBFC
Lending
money
Hire
purchase
finance
Leasing
finance
Housing
finance
Other
Other
Types
Types also
also
provided
provided
by
by NBFCs
NBFCs
Investment
of surplus
money
(1) RECEIVING OF BENEFITS The primary
function of NBFCs is receiving deposits
from public in various forms such as issues
of debentures, saving certificate
subcriptions, Unit certification Etc
(2) LENDING MONEY -Another important
function of nbfcs is lending money to
public. Non-banking financial companies
provide financial assistance through.
(a) Hire purchase finance:
(a) Hire purchase finance:
Hire purchase finance is given by nbfcs to help small
Hire purchase finance is given by nbfcs to help small
important operators, professionals, and middle income
important operators, professionals, and middle income
group people to buy the equipment on the basis on Hire
group people to buy the equipment on the basis on Hire
purchase
purchase
(b) Leasing Finance
(b) Leasing Finance
In leasing finance, the borrower of the capital equipment
In leasing finance, the borrower of the capital equipment
is allowed to use it, as a hire, against the payment of a
is allowed to use it, as a hire, against the payment of a
monthly rent. The borrower need not purchase the capital
monthly rent. The borrower need not purchase the capital
equipment but he buys the right to use it.
equipment but he buys the right to use it.
(c) Housing Finance
(c) Housing Finance
NBFCs provide housing finance to the public, they
NBFCs provide housing finance to the public, they
finance for construction of houses, development of
finance for construction of houses, development of
plots, land, etc.
plots, land, etc.
(d)Other types of finance provided by
(d)Other types of finance provided by
NBFCs include:
NBFCs include:
Consumption finance, finance for
Consumption finance, finance for
religious ceremonies, marriages, social
religious ceremonies, marriages, social
activities, paying off old debts, etc.
activities, paying off old debts, etc.
(e) Investment of surplus money:
(e) Investment of surplus money:
NBFCs invest their surplus money in
NBFCs invest their surplus money in
various profitable areas.
various profitable areas.
RBI directed NBFCs to maintain Net-owned Funds
on NBFC
(NOF) at Rs 3Current
crore byAffairs
31 March
2013, and ar Rs. 5
crore by 31 March 2014.
Thirty-one NBFC-microfinance institutions (NBFC-MFIs)
came together to set up Microfinance Institutions
Network (MFIN), a self-regulatory organization (SRO)
of NBFC-MFIs in March 2010.
The RBI in its revised guidelines stipulated that NBFC
cannot sell or securitise a loan unless three monthly
installments have been paid by the borrower. The
latest directives from the RBI are aimed at checking
unhealthy practices and distributing risk to a wide
spectrum of investors.
RBI Panel headed by Usha Thorat, suggested the
central bank to insist on a minimum asset size of more
than Rs.50 crore for registering any new non-banking
finance company (NBFC). The panel reccomended
deregistration of the existing NBFCs that fell below the
limit prescribed.
Mahindra and Mahindra
Finance Ltd
Mahindra and Mahindra Financial Services Limited is
one of Indias leading non-banking finance companies.
Their rural financing is considered as the basis of
poverty reduction, rural development and inclusive
growth in many parts of the country.
They currently provide employment to over 6200
people who belong to the areas in which we serve,
ensuring that our employees truly understand their
customers.
Their goal is to be the preferred provider of retail
financing services in the rural and semi-urban areas of
India, while our strategy is to provide a range of
financial products and services to our customers
through our nationwide distribution network.
CUSTOMER SERVICE
The key factor for our survival and growth
NBFCs provides prompt, tailor made
services with least hassles. This more than
compensates for higher lending rates of
NBFCs as compared to Banks and FIs
All customers get direct and easy access to and
individual attention of the top management
NBFCs cater to a class of
borrowers who:not
necessarily
-But-Do
have
adequate
net have
worthhigh
income
-Are honest and sincere (gauged by the
personal touch maintained with them).
NBFCs are gaining momentum in last few decades with
wide variety of products and services.
NBFCs collect public funds and provide loan able
funds.
There has been significant increase in such companies
since 1990s.
They are playing vital role in the development financial
NBFCs in India have become prominent in wide
system of our country
range of activities like hire purchase finance ,
equipment lease finance , loans , investments and ,
so on.
The NBFC sector has continuously played a critical
role in economic development and hence needs to
be nurtured appropriately
Product and services offered by Mahindra
and Mahindra FINANCE LIMITED
Utility Vehicles
Tractor Loans
Car Loans
Two-Wheeler Loans
Three-Wheeler Loans
Refinance
Commercial Vehicle Loans
Construction Equipment's
Home Loans
Investment Advisory Services - Mutual Fund
Distribution
Personal Loans
Insurance
