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Abstract
Non-banking financial companies (NBFCs) and banks are the key financial intermediaries offering almost similar services to the consumers. NBFCs are slightly different from the banks as the former cannot issue self-drawn cheques and demand drafts as well as NBFCs cannot accept demand deposits.Prior to announcement made by Reserve Bank of India in Feb 2019, NBFCs were classified into twelve types. Under the new scheme of NBFCs as announced by RBI in Feb 2019, three categories of NBFCs (1. Asset finance companies 2. Loan companies 3. Investment companies) will be merged into a new category NBFC-ICC (NBFC-Investment and Credit Company). Harmonisation of different categories of NBFCs into fewer once will provide them greater operational flexibility. The present paper is an attempt to discuss the various new categories of NBFCs in Indian economy. To ensure the financial stability of NBFCs in the long run, RBI bundles NBFCs into fewer categories in the first quarter of 2019. The present study covers all such measures.