Non-Banking Financial Companies are financial institutions engaged in several non-banking businesses like hire purchase, leasing, microfinance, chit fund, gold loan etc. These entities are not allowed to offer financial products and services like banks. According to the RBI, ‘A non-banking institution which is a company and has principal business of receiving deposits under any scheme or arrangement in one lump sum or in installments by way of contributions or in any other manner, is also a non-banking financial company (Residuary non-banking company).’ NBFCs are defined under section 45 I (c) of the RBI Act, 1934.
