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Important facts about NBFC in India
Posted: Sep 26, 2018
The confusion about the difference in an NBFC and a bank still lingers on. To attain clarity and also to differentiate the two, we present to you some of the important information that helps you gain clarity on how NBFC in India functions.
NBFC basically means Non-Banking Financial Institute. It is an organization that is been registered under the Companies Act 1956. The purpose of this organization is to engage in the business of loans and advances. It also deals in the acquisition of shares/stock/bonds/debentures/securities issued by a government or local authority. Apart from these some other facets of NBFC include leasing, hire-purchase, insurance business, chit business.
One thing needs to be highlighted is that it does not include any organization whose primary business entails agricultural activity.
NBFC’s do function like a bank but there are some differences between the two. Here are some of them. NBFC does not come under the system of issuing cheques to its customers. Similarly, NBFC cannot demand deposits.
Also, moving on to the Real Estate NBFC, it has seen a steady rise over the processes on how loans can be acquired. Many experts have noticed that NBFC has constantly been making inroads into the realty sector. One of the reasons for the rising popularity is due to its hassle-free funding as compared to acquiring loans from a bank.
Post the Real Estate and Regulation Act (RERA) real estate is seeing a change in the industry being organized and more consolidated. Good governance if followed by reals estate builders by ensuring transparency and commitment for efficient delivery in time will be given the permits to work. Others will be gotten rid of. This will give Real estate NBFC a better edge over the loan market and they can promote and work more efficiently as the chances of bad loans through transparent governance reduces.
JMFL also strongly believes in good practices. Hence, they provide the facility of NBFC wherein you can acquire a loan in a convenient manner without much efforts. They provide funds for domestic companies seeking capital to expand further. Their funding services include sectors such as the fund, whose focus sectors included consumer services, financial services, infrastructure services, manufacturing, education and outsourcing services. So, do visit their website and do avail their expertise for your business needs.
Hi, I am Swapnil Khandekar. I love to write educational and travel related blogs.