NBFC are broadly categorised:
a. In terms of the type of liabilities into Deposit and Non-Deposit accepting NBFCs,
b. Non-Deposit taking NBFCs by their size into systematically important and other non-deposit holding companies (NBFC-NDI and NBFC-ND) and
c. By the kind of activity, the conduct.
Within this broad categorization the different types of NBFCs are as follows:
Asset Finance Company (AFC)
And AFC is a company which is a financial institution carrying on as its principal productive/economic activity, such as automobiles, tractor, lathe machines, generator sets, earth moving and material handling equipment, moving on own power and general-purpose industrial machines. Principal business for the purpose is defined as aggregate of financing real/physical assets supporting economic activity and income arising therefrom is not less than 60% of its total assets and total income, respectively.
Investment Company (IC)
IC means any company which is a financial institution carrying on its principal business the acquisition of securities.
Loan Company (LC)
LC means any company which is a financial institution carrying on as its principal business that providing of finance whether by making loans or advances or otherwise for any activity other than its own but does not include as Asset Finance Company.
Infrastructure Finance Company (IFC)
IFC is a non-Banking finance company:
a. Which deploys at least 75 percent of its total assets in infrastructure loans,
b. Has a minimum Net Owned Funds of Rs300 Crore,
c. Has a minimum credit rating of ‘A’ or equivalent,
d. A CRAR of 15%
Systematically Important Core Investment Company (CIC-ND-SI)
CIC-ND-SI is an NBFC carrying on the business of acquisition of shares and securities which satisfies the following conditions:
a. It holds not less than 90% of its Total Assets in the form of investment in equity shares, preference shares, debt, or loans in group companies.
b. Its investment in the equity shares (including instruments compulsorily convertible into equity shares within a period not exceeding 10 years form the dare of issue) group companies constitute not less than 60% of its total assets.
c. It does not trade in tis investment in shares, debt, or loans in group companies except through block sale for the purpose of dilution or disinvestment.
d. It does not carry on any other financial activity referred to in section 45I(c) and 45I(f) of the RBI Act, 1934 except investment in bank deposits, money market instruments, government securities, loans to and investment in dent issuances of group companies or guarantees issued on behalf of group companies.
e. Its asset size is Rs100 Crore or above, and
f. It accepts public funds.
Infrastructure Debt Fund Non-Banking Financial Company ((IDF-NBFC)
IDF-NBFC is a company registered as NBFC to facilitate the flow of long-term debt into infrastructure projects. IDF-NBFC raise resources through issue of Rupee or Dollar denominated bonds of minimum 5-year maturity. Only Infrastructure Finance Companies (IFC) can sponsor IDF-NBFCs.
Non-Banking Financial Company - Micro–Finance Institution (NBFC-MFI)
NBFC-MFI is a non-deposit taking NBFC having not less than 85% of its assts in qualifying assets which satisfy the following criteria:
a. Loan disbursed by an NBFC-MFI to a borrower with a rural household annual income not exceeding INR1,00,000 or urban and semi-urban household income not exceeding INR1,60,000.
b. Loan amount does not exceed INR50,000 in the first cycle and INR1,00,000 in subsequent cycles.
c. Total indebtedness of the borrower does not exceed INR 1,00,000.
d. Tenure of the loan not to be less than 24 months for loan amount in excess of INR 15,000 with prepayment without penalty.
e. Aggregate amount of loans, given for income generation, is not less than 50 percent of the total loans given by the MFI.
f. Loan is repayable on weekly, fortnightly, or monthly instalments are the choice of the borrower.
Non-Banking Financial Company - Factors (NBFC-Factors)
MBFC-Factor is a non-deposit taking NBFC engaged in the principal business of factoring. The financial assets in the factoring business should constitute at least 50 percent of its total assets and its income derived from factoring business should not be less than 50 percent of its gross income.
Mortgage Guarantee Companies (MGC)
MGC are financial institution for which at least 90 percent of the business turnover is mortgage guarantee business or at least 90 percent of the gross income is from mortgage guarantee business and net owned fund is INR 100 crore.
NBFC - Non-Operative Financial Holding Company (NOFHC)
NOFCH is financial institution through which promoter or promoter groups will be permitted to set up a new bank, its wholly owned Non-Operative Financial Holding Companies (NOFHC) which will hold the bank as well as all other financial services companies regulated by RBI or other financial sector regulators, to the extent permissible under the applicable regulatory prescriptions.
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