Categories of NBFC’s


NBFCs are institutions that perform a diversified range of functions and offer various financial services to individuals, corporate and institutional clients. They cover a wide range of institutions from highly specified institutions such as development banks or insurance companies to simple institutions like mutual savings society.


The Non-Banking Financial Companies (NBFC) are categorized by RBI into various categories on the basis of their nature and activities:-

  • Equipment Leasing Company
  • Mutual Benefit Financial Companies
  • Housing Finance company
  • Loan Company
  • Investment Company
  • Hire Purchase Company

01. Equipment Leasing Company

Equipment leasing company means any company, principal business of which is leasing of equipment or the financing of such activity.

02. Mutual Benefit Financial Companies

Mutual Benefit Financial companies are the companies that provide finance to the members of the companies and accept deposits form them.

03. Housing Finance company

Housing Finance company is a company which provides finance for acquisition and/or construction of houses, acquisition of land and development of plot or land.

04. Loan Company

Loan company is a company which carries on its principal business as the providing of finance whether by making loans or advances or otherwise for any activity other than its own. These activities exclude leasing and hire purchase.

05. Investment Company

The main business of an Investment Company is to acquire securities and resale it later. They buy new issues from security issuers and make the arrangement for resale to the investing public.

06. Hire Purchase Company

Hire-purchase Company finances the price of the goods to be sold at a future date. The goods are in fact let on hire by the hire purchase company with a condition to pay the installments by the hirer and after all the installments are paid by the hirer will have an option to purchase it later.

Role of NBFC's

Role of Non-Banking Finance Companies (NBFC’s)

functions of money market

Functions of Money Market