NBFC Bank List In this blog, we will discuss Bajaj Finance Ltd’s deals in lending, defence and defence services, and Mahindra & Mahindra Financial Services focuses on rural business. Aditya Birla Finance and L&T Finance offer retail and corporate loans, while Muthoot Finance is known for gold lending. Shriram Finance focuses on vehicle and business sectors, and Tata Capital Financial Services deals in personal and business loans. HDB Financial Services offers personal lending and consumer finance, Ujjivan Small Finance Bank serves underserved areas, and Piramal Capital offers home and structured finance. Together, they contribute significantly to financial inclusion in India.
What is NBFC Bank?
NBFC Bank stands for Non-Banking Financial Company. It is a financial institution that provides various banking and financial services but does not have a full banking license. This means that NBFCs can do many of the same things as banks, but they work under different principles and have some limitations compared to traditional banks.
1. Lack of banking licence: Unlike banks, NBFCs do not have a banking licence and hence cannot accept demand deposits (like cheque accounts) from the public.
2. Financial Services Offered:
- Loans and Credit: NBFCs offer personal lending, work loans, auto loans and other credit facilities.
- Asset financing: They provide services such as leasing and land purchases for assets such as machinery, vehicles, and equipment.
- Investment services: Some NBFCs are engaged in investment activities, including mutual funds and defence products.
- Wealth Management: Providing advisory services for investment and financial planning.
3. Regulation:
- In many countries, including India, NBFCs are regulated by a central financial authority (such as the Reserve Bank of India or RBI).
- They must comply with unusual regulatory norms relating to capital requirements, reporting and governance, although these are less stringent than those for traditional banks.
4. Customer Base: NBFCs often serve under-served or unusual markets, providing financial services to individuals and businesses that may not qualify for traditional bank loans.
5. Funding sources: As against banks, which can raise deposits from the public, NBFCs primarily depend on methods such as issuing debentures, borrowing from banks and raising capital from investors to finance their operations.
What are the Differences Between NBFCs and Banks?
| Feature | NBFCs | Banks |
|---|---|---|
| Accepting Deposits | Cannot accept demand deposits | Can accept demand and time deposits |
| Payment Services | Limited or no ability to provide payment services like issuing cheques | Can offer a wide range of payment services, including issuing cheques and debit cards |
| Regulation | Regulated by financial authorities but under different frameworks | Heavily regulated with stricter compliance requirements |
| Credit Creation | Cannot create credit in the same way banks do | Can create credit through deposit mobilization |
Here are Top 10 NBFC Bank List?
1. Bajaj Finance Limited
2. Mahindra & Mahindra Financial Services Limited
3. Aditya Birla Finance Limited
4. L&T Finance
5. Muthoot Finance
6. Shriram Finance Limited
7. Tata Capital Financial Services Limited
8. HDB Financial Services
9. Ujjivan Small Finance Bank
10. Piramal Capital and Housing Finance Limited
1. Bajaj Finance Limited
Bajaj Finance Limited is India’s largest and most well-known non-banking financial company (NBFC). It is part of the Bajaj Group, and operates as a diversified services company offering a wide range of financial products.
Bajaj Finance Limited is a leading NBFC in India known for its diverse range of financial products, focus on customer lending, and innovative digital services. By offering flexible financing options, attractive interest rates, and technological tools, Bajaj Finance has established itself as a trusted choice for a wide customer base, contributing significantly to consumer finance and overall economic growth in India.
Founder: Rahul Bajaj
Founded: 25 March 1987
2. Mahindra & Mahindra Financial Services Limited
Mahindra & Mahindra Financial Services Limited (MMFSL), frequently referred to as Mahindra Finance, is a leading non-banking financial company (NBFC) in India. It is part of the Mahindra Group, one of the largest and most respected business conglomerates in India, with operations in a number of sectors including automotive, agribusiness, aerospace and finance.
Mahindra & Mahindra Financial Services Limited plays a vital role in promoting rural inclusion in India, particularly in rural and semi-urban areas. By focusing on vehicle, tractor and SME financing and leveraging its relationship with the Mahindra Group, the company has established itself as the market leader in rural finance.
Founder: Raul Rebello
Founded: 1991
3. Aditya Birla Finance Limited
Aditya Birla Finance Limited (ABFL) is a leading non-banking financial company (NBFC) in India, part of Aditya Birla Capital Limited (ABCL), the financial services arm of the Aditya Birla Group. ABFL offers a wide range of financial services to retail, high net worth individuals (HNIs) and corporate clients.
Aditya Birla Finance Limited is a leading NBFC in India with a strong portfolio offering a wide range of financial services to both retail and corporate customers. Leveraging the strength and credibility of the Aditya Birla Group, ABFL focuses on providing customized lending instruments, maintaining high asset quality and constantly adopting technology-driven initiatives to enhance customer experience.
Founder: Aditya Birla
Founded: 1991
4. L&T Finance
L&T Finance is a subsidiary of L&T Finance Holdings Limited, part of the larger Larsen & Toubro (L&T) group – a leading Indian multinational company engaged in engineering, construction, manufacturing, technology and financial services. L&T Finance is an India-based non-banking financial company (NBFC) offering a wide range of financial products and services.
L&T Finance is a leading NBFC in India, offering a wide range of financial services with a special focus on rural, residential and infrastructure finance. With the backing of the L&T Group, L&T Finance leverages its expertise in the infrastructure sector to provide financing solutions that support the growth of key industries.
Founder: Sudipta Roy
Founded: 1994
5. Muthoot Finance
Muthoot Finance Limited is one of India’s largest non-banking financial companies (NBFCs) and the flagship company of the Muthoot group. It primarily focuses on gold financing, providing loans against gold jewellery, but also offers other financial services.
Muthoot Finance is a leading NBFC specialising in gold loans, which leverage the value of gold to provide quick and easy access to credit for individuals and businesses. Its strong branch network, trust and customer-friendly loan products have made it a leading player in the gold financing space in India.
Founder: Mathai George Muthoot
Founded: 1939
6. Shriram Finance Limited
Shriram Finance Limited (SFL) is one of India’s largest non-banking financial companies (NBFC), engaged in providing a range of financial products and services, primarily focused on rural and semi-urban customers. It is part of the Shriram Group, which has significant presence in financial services, including lending, insurance and asset management.
Shriram Finance Limited is a leading player in India’s NBFC sector, with a primary focus on underserved rural and semi-urban markets. It is noted for its expertise in commercial vehicle financing and its commitment to financial inclusion, serving first-time borrowers and small businesses.
Founder: R. Thyagarajan
Founded: 1979
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7. Tata Capital Financial Services Limited
Tata Capital Financial Services Limited (TCFSL) is a renowned non-banking financial company (NBFC) in India, and is part of the Tata Group, one of India’s largest and most respected conglomerates. Tata Capital Financial Services Limited offers a wide range of financial products and services to individuals, SMEs and corporate customers.
Tata Capital Financial Services Limited is a premier NBFC in India, known for its strong following from the Tata community, a wide range of financial products and customer-centric approach. With its focus on leveraging technology and providing flexible financial instruments, Tata Capital has established itself as a trusted and reliable financial partner for individuals, businesses and corporates across the country.
Founder: Ratan Tata
Founded: 2007
8. HDB Financial Services
HDB Financial Services Limited is a popular non-banking financial company (NBFC) in India, incorporated in 2007. It is a subsidiary of HDFC Bank, one of India’s leading private state-owned banks. HDB Financial Services focuses on providing a range of financial products and services aimed at enhancing customer convenience and accessibility.
HDB Financial Services is part of the HDFC group, which also includes HDFC Bank, one of India’s largest individual banks. The relationship with HDFC gives HDB Financial Services a strong brand reputation and financial stability.
Founder: Aditya Puri
Founded: 2007
9. Ujjivan Small Finance Bank
Ujjivan Small Finance Bank (USFB) is a popular small finance bank in India, which focuses on providing financial services to investors and borrowers from a particular segment of the population. It was established to further the financial inclusion work of the Government of India and to serve people who are not easily accessible through traditional financial logistics services.
Ujjivan Small Finance Bank was launched in February 2017 after receiving a banking licence from the Reserve Bank of India (RBI). It was spun off from Ujjivan Financial Services, which was primarily a microfinance institution (MFI) set up in 2005.
Founder: Samit Ghosh
Founded: 2005
10. Piramal Capital and Housing Finance Limited
Piramal Capital and Housing Finance Limited (PCHFL) is a leading financial services company in India that operates as a non-banking financial company (NBFC) and a housing finance company (HFC). It is a subsidiary of Piramal Enterprises Limited, part of the Piramal Group, which has diversified interests in pharmaceuticals, financial services and real estate.
PCHFL is a part of the Piramal Group, founded by Ajay Piramal. Over the years, the group has grown exponentially and diversified into various industries including healthcare, real estate and financial services.
Founder: Rajesh Wadhawan
Founded: 11 April 1984
Conclusion
Non-Banking Financial Companies (NBFCs) play a vital role in the financial ecosystem, bridging the gaps left by traditional banks and providing a wide range of financial products to individuals, businesses and underprivileged classes. Unlike banks, NBFCs cannot adopt demand deposits, but they provide essential services such as lending, credit facilities, asset financing and investment products, playing a vital role in economic growth and financial inclusion. With their flexibility, customer-centric approach and use of innovative digital platforms, NBFCs complement the role of banks by reaching niche markets and providing financial access to people who may not be eligible for traditional banking services.
FAQs
1. Is NBFC Bank private or government?
NBFCs (non-banking financial companies) in India are registered as either public or private limited companies, but they are not banks. They provide some banking-like services without a banking license. Unlike banks, NBFCs cannot accept demand deposits or create credit like traditional banks.
2. Which is the no. 1 NBFC in India?
Bajaj Finance Ltd.
3. Who controls NBFC in India?
As per the RBI Act, 1934, the Reserve Bank of India is empowered to regulate and control non-banking financial companies (NBFCs) through monitoring, supervision, inspection, issuing directions and laying down policies.
4. Are NBFC loans good?
People choose NBFCs for loans due to faster approvals, flexible norms, personalized service, diverse products, and competitive rates. NBFCs also serve a wider audience, including rural borrowers and those with low credit scores.
5. Who gives money to NBFC?
NBFCs raise money primarily by accepting non-chequable deposits and borrowing from other financial institutions.
6. Who can open NBFC?
A company must be registered as a private or public limited company under the Companies Act, 1956 on or before the Companies Act, 2013.
7. Which NBFC has highest interest?
Bajaj Finance offers the highest interest rates on NBFC FDs, up to 8.65% per annum.
8. Is LIC a NBFC?
The Reserve Bank of India (RBI) has identified 15 NBFCs, including LIC Housing Finance, Bajaj Finance, Shriram Finance, Tata Sons and Cholamandalam Investments, and placed them in the upper layer (NBFC-UL) under scale-based regulation (SBR) for non-bank lenders.
9. How to check if a company is NBFC?
The list of registered NBFCs can be accessed on Reserve Bank of India website www.rbi.org.in → Sitemap → NBFC List.
10. Is NBFC fd safe?
Just like bank fixed deposits, NBFC fixed deposits allow investors to deposit a lump sum amount for a fixed period at a pre-determined interest rate. These are considered a safe investment option, which attracts risk-averse investors.
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