These companies are under obligation to fulfill the statutory requirements imposed by the Companies Act and RBI.

Where the depositor dies, the company may repay the deposit at the request of the joint holders within the lock-in period.

Define a Non-Banking Financial Company (NBFC)?

The term debt has been defined under Section 2 of “The Recovery of Debts Due to Banks and Financial Institutions Act, 1993” as: Liability (including interest) due from any person, as claimed by a bank/ financial institution/ consortium of banks/ financial institutions during the course of any business activity undertaken by such institution, which is in cash/otherwise, secured/unsecured, or assigned or to be paid under a decree or order of a civil court or arbitration award or otherwise or under a mortgage and recoverable on, the date of the application.

The company registered under the Companies Act, 2013 whose principal business is Financial activity such as chit fund business, insurance business, loans and advances, acquisition of shares or other types of securities, leasing, etc. is a Non-Banking Financial Company (NBFC).

A Non-Banking Financial Company (NBFC) is a financial institution that works like a bank but does not have a banking license offering financial products and services to customers.

Thus, NBFCs cannot depend on the Current Account Savings Account, which raises the requirement for locating another source of supply for funds for NBFCs.

One of the initiatives taken by the government is the Scheme for Facilitating Startups Intellectual Property Protection (SIPP), which was introduced in 2016 with the aim of facilitating the protection of Intellectual Property by Startups.

This article focuses on providing the variance between NBFC and Fintech companies.

The exempted categories of NBFC are: Venture Capital Fund Merchant Banking companies Stock Broking Companies Insurance Company  Nidhi Companies  Chit Companies  Housing Finance Companies Mandatory requirements for obtaining CoR from RBI: A company willing to work as an NBFC must fulfill the below-mentioned conditions: The company must be registered under the Companies Act, 2013.