India’s Leading BFSI and FinTech Companies 2021

22 Non-Banking Financial Institutions (NBFIs) play an important role in India as an alternative source of finance and also cater to the demand for niche finance and last mile outreach. NBFIs are regulated by the RBI and include Non-Banking Financial Companies (NBFCs), Housing Finance Companies, All-India Financial Institutions and Primary Dealers. NBFCs complement Banks in terms of credit delivery and financial intermediation, meeting the financial needs of the corporate sector, the unorganized sector, especially micro, small and medium enterprises (MSMEs) as well as small retail borrowers, thereby contributing to nation building and financial inclusion. NBFCs can be classified on the basis of aspects such as a) asset/liability structures; b) systemic importance; and c) the activities they undertake. In terms of liability structures, NBFCs are sub-divided into deposit-taking NBFCs (NBFCs-D) - which accept and hold public deposits - and non-deposit taking NBFCs (NBFCs-ND) - which source their funding from markets and banks. Among non- deposit taking NBFCs, those with asset size of ` 5 bn or more are classified as non-deposit taking systemically important NBFCs (NBFCs-ND-SI). As on July 16, 2020, there were 64 NBFCs-D and 292 NBFCs-ND-SI as compared to 88 and 263 at end-March 2019, respectively. On the basis of activity, NBFCs can be classified into the following 11 types – • Investment and Credit Company (ICC): Lending and investment. • NBFC-Infrastructure Finance Company (NBFC-IFC): Provision of infrastructure loans. • NBFC-Systemically Important Core Investment Company (CIC-ND-SI): Investment in equity shares, preference shares, debt or loans in group companies. • NBFC-Infrastructure Debt Fund (NBFC-IDF): Facilitation of flow of long-term debt into infrastructure projects. • NBFC-Micro Finance Institution (NBFC-MFI): Credit to economically disadvantaged groups. • NBFC-Factor: Acquisition of receivables of an assignor or extending loans against the security interest of the receivables at a discount. • NBFC-Non-Operative Financial Holding Company (NBFC-NOFHC): Facilitation of promoters/ promoter groups in setting up new banks. • Mortgage Guarantee Company (MGC): Undertaking of mortgage guarantee business. • NBFC-Account Aggregator (NBFC-AA): Collecting and providing information about a customer’s financial assets in a consolidated, organized and retrievable manner to the customer or others as specified by the customer. • NBFC–Peer to Peer Lending Platform (NBFC-P2P): Providing an online platform to bring lenders and borrowers together to help mobilize funds. • Housing Finance Companies (HFC): Financing for housing. In FY19, three categories of NBFCs namely, asset finance companies (AFCs), loan companies (LCs) and investment companies (ICs) were merged into a new category called Investment and Credit Companies (ICCs) for the sake of harmonization and operational flexibility. NBFCs-ND-SI comprise 85.7% of the total assets of the NBFC sector with few large government-owned NBFCs, whichmainly cater to the infrastructure segment, accounting for 43.3% of the total assets of NBFCs-ND-SI. Non-Banking Financial Companies (NBFCs) Du & Bradstreet