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NBFC¶sNBFC¶s

MADE BY-

PRIYA TIWARI

SUDHANSHU GOYAL

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INTRODUCTION

NBFC is a company registered under the

Companies Act 1956.

It is also registered under RBI Act-1934,u/s 451(A).

Engaged in the business of loans, leasing,

hire-purchase, chit-business etc.

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DEFINITION

Non-Banking 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. However thisdepends 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.

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PURPOSE OF CREATION OF NBFC

Banks-Financial Institution-reached the major

section of every country of the world.

Still there are some rural , underprivileged andunderserved sections in each of the nations.

Requirement of the services of some financial

institutions which could cater to their needs.

Lead to the creation of the NBFC.

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NBFC IS DIFFERENT FROM BANK

A NBFC cant accept demand deposits.

A Bank interact with customers directly while a NBFC

interacts with Banks and Government.

Banks-covered major section of the nation-but still

some under-served sections exist-need for financial

institutions for them-NBFCs CAME INTO PICTURE.

NBFC COVERS SOME UNENTERTAINED AREAS LIKE- -EQUIPMENT LEASING

-LOANS

-CHIT-FUNDING etc.

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TYPES OF NBFCsTYPES OF NBFCs

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TYPES

NBFCs as described by RBI-

EQUIPMENT-LEASING COMPANY;

HIRE-PURCHASE COMPANY; LOAN COMPANY;

INVESTMENT COMPANY;

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LOAN COMPANYLOAN COMPANY

Loan company means a company which is a

financial institution carrying on as its principal

business for providing finance whether by

making loans or advances or otherwise for any

activity but does not include an equipment

leasing company or a hire-purchase finance

company.

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HIREHIRE--PURCHASE COMPANYPURCHASE COMPANY

Hire purchase (frequently abbreviated to HP) is thelegal term for a contract developed in the UnitedKingdom.

In cases where a buyer cannot afford to pay the askedprice for an item of property as a lump sum But, canafford to pay a percentage as a deposit, a hire-purchasecontract allows the buyer to hire the goods for amonthly rent.

When sum equal to the original full price plus interest

has been paid in equal installments. the buyer may then exercise an option to buy the

goods at a predetermined price (usually a nominalsum) or return the goods to the owner.

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INVESTMENT COMPANYINVESTMENT COMPANY

An investment company is a company whose

main business is holding securities of other

companies purely for investment purposes. The

investment company invests money on behalf

of its shareholders who in turn share in the

profits and losses.

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CONCLUSION

The future of the Non-Banking FinancialCompanies would depend largely on theirperformance in the present slowdown.

It will be a deciding factor for their future scopeand role in the emerging global financial markets.

In the PRESENT SCENARIO, it is very essential forthem to come up with best of customer services

round-the-world because this is the basic strengthof this sector.

They need to explore all possible opportunitiesbut also need to strengthen their BASICS too!!!

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NBFC NEW

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