NBFC Types

You can start NBFC for following NBFC Types:

1. On the basis of liabilities:
   1. The deposit accepting NBFCs and
   2. Non-Deposit accepting NBFCs,
2. Non-deposit taking NBFCs on the basis of size:
   1. systemically important (NBFC-NDSI) and
   2. other non-deposit holding companies and NBFC-ND)
3. On the basis of kind of activity:

1. • Asset Finance Company
   • Non-Banking Financial Company– Factors
   • Mortgage Guarantee Companies
   • Investment Company
   • Loan Company
   • Infrastructure Debt Fund Non- Banking Financial Company
   • Non-Banking Financial Company-Micro Finance Institution
   • NBFC- Non-Operative Financial Holding Company
   • Infrastructure Finance Company
   • Systemically Important Core Investment Company

Categories of NBFC

You can apply for NBFC Registration in following categories:

Asset Finance Company (AFC): an Asset Finance Company is an NBFC with a principal business of giving loans for physical assets to help support new and growing economic activity. For example, if you are an automobile manufacturer or distributor interested in financing tractors, motorcycles, buses, trains, etc. you can do it by forming an Asset Finance Company.

Investment Company (IC): An investment company is an NBFC with a principal business of acquisition of securities. If you want to start a Venture Capital Fund or a Private Equity Business than using the services of an investment company is recommended.

Loan Company (LC): a Loan Finance Company is an NBFC with a principal business of giving loans expect financing assets. If you want to give secured or unsecured loans to individuals loan company is recommended.

Infrastructure Finance Company (IFC): Infrastructure Finance Company is an NBFC with the principal business of providing finance to infrastructure projects meeting the following criteria:

It should deploy at least 75 percent of total assets in infrastructure loans
Should have a minimum net owned fund of ₹ 300 Crore
Should have a credit rating of ‘A’ and a CRAR of 15%

If you are interested in financing infrastructure-related projects like construction of roads, bridges, new buildings, etc. this is the recommended way to do.

Infrastructure Debt Fund (IDF): Infrastructure Debt fund is an NBFC which facilitate the flow of long-term debt into infrastructure projects It can raise resources through currency bonds of minimum five years. If you are interested in raising funds and financing Infrastructure projects like construction of roads, bridges and other infrastructure projects etc. this is recommended.

Microfinance Institution (MFI): a Microfinance Institution is a non-deposit taking NBFC for lending on a short-term basis to low-income groups in India. This avenue is recommended if you want to provide small credits to rural households with income not exceeding ₹ 60,000 or Urban and semi-urban household with income not exceeding ₹ 1,200,000. Provided that the tenure of the loan not to be less than 24 months there is No Prepayment Penalty unless loan amounts happen to be in excess of ₹15,000.

Non-Banking Financial Company – Factors (NBFC-Factors): this type of NBFC has a principal business of factoring. Factoring is a financial transaction and a type of debtor finance in which a business sells its accounts receivable (i.e., invoices) to a third party (called a factor) at a discount. Recommended if you want to provide credit to accounts receivable.