Non-banking financial company
Non-bank financial companies (NBFCs) also known as a
non-bank or a
non-bank bank, are
financial institutions that provide
banking services without meeting the legal definition of a
bank, i. e. one that does not hold a
banking license. Operations are, regardless of this, still exercised under
bank regulation. However this depends on the jurisdiction, as in some jurisdictions, such as New Zealand, any company can do the business of banking, and there are no banking licences issued.
Non-bank institutions frequently acts as suppliers of
loans and credit facilities, however they are typically not allowed to take
deposits from the general public and have to find other means of funding their operations such as issuing
debt instruments. In India, most NBFCs raise capital through
Chit Funds.
