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. These institutions are not allowed to take deposits from the public. Nonetheless, all operations of these institutions are still exercised under bank regulation.
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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
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1 Services provided 2 Regulation 3 Classification 4 See also 5 References 6 External links

[edit]Services

provided

NBFCs offer all sorts of banking services, such as loans and credit facilities, private education funding, retirement planning, trading in money markets, underwriting stocks and shares, TFCs and other obligations. These institutions also provide wealth management such as managing portfolios of stocks and shares, discounting services e.g. discounting of instruments and advice on merger and acquisition activities. The number of non-banking financial companies has expanded greatly in the last several years as venture capital companies, retail and industrial companies have entered the lending business. Non-bank institutions also frequently support investments in property and prepare feasibility, market or industry studies for companies. 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. [edit]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 URL choice (where they are established) and then passport their payment services into other Member States across the EU.nbfc is basically for those people who want better service in short period of time . [edit]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 6. Venture capital companies 7. Discount & guarantee houses 8. Corporate development companies