18/2/2011 Non-banking financial company - Wik…

Non-banking financial company

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(Redirected from NBFC)

Non-bank financial companies (NBFCs) 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 licenses issued.

Contents
1 Services provided
2 Regulation
3 Classification
4 See also
5 External links

Services provided
Non-bank institutions frequently

act as suppliers of loans and credit facilities

supporting investments in property
trade money market instruments
fund private education
provide wealth management such as managing portfolios of stocks and shares
underwrite stock and shares, TFCs and other obligations
provide retirement planning
advise companies in merger and acquisition
prepare feasibility, market or industry studies for companies
provide discounting services e.g., discounting of instruments

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.

Regulation
For European NCs the Payment Services Directive (PSD) is a regulatory initiative from the European
Commission to regulate payment services and payment service providers throughout the European Union (EU)
and European Economic Area (EEA). The PSD describes which type of organisations can provide payment
services in Europe (credit institutions (i.e. banks) and certain authorities (e.g. Central Banks, government
bodies), Electronic Money Institutions (EMI), and also creates the new category of Payment Institutions).
Organisations that are not credit institutions or EMI, can apply for an authorisation as Payment Institution in any
EU country of their choice (where they are established) and then passport their payment services into other
Member States across the EU.

http://en.wikipedia.org/wiki/NBFC 1/2
18/2/2011 Non-banking financial company - Wik…

Classification
Depending upon their nature of activities, non- banking finance companies can be classified into the following
categories:

1. Development finance institutions

2. Leasing companies
3. Investment companies
4. Modaraba companies
5. House finance companies f
6. Venture capital companies
7. Discount & guarantee houses

See also
Alternative financial services
Non-bank financial institution
Shadow banking system

External links
Factoring in India (http://www.languages.ind.in/factoring.htm)
RBI (India) FAQ's for NBFC (http://www.rbi.org.in/scripts/FAQDisplay.aspx?dId=47939)
Retrieved from "http://en.wikipedia.org/wiki/Non-banking_financial_company"
Categories: Financial services

This page was last modified on 28 January 2011 at 17:02.

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http://en.wikipedia.org/wiki/NBFC 2/2