---
title: "Non-Banking Financial Company (NBFC): Definition"
description: "A Non-Banking Financial Company (NBFC) provides loans and investments without a banking license, making it crucial for financial inclusion in India."
url: "https://modeldiplomat.com/learn/glossary/non-banking-financial-company"
---

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Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- A Non-Banking Financial Company is a company registered under the Companies Act that provides financial services such as loans, asset financing, and investment without holding a banking licence or accepting demand dep…
- How does an NBFC differ legally from a commercial bank in India?
- What is the Scale Based Regulation framework for NBFCs?
- What triggered tighter NBFC regulation after 2018?
- What is the minimum net owned fund required to register an NBFC?

[Civil Service & Diplomatic Exams](https://modeldiplomat.com/learn/civil-services/glossary)Updated June 22, 2026

A Non-Banking Financial Company is a company registered under the Companies Act that provides financial services such as loans, asset financing, and investment without holding a banking licence or accepting demand deposits.

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In November 2019 the Reserve Bank of India superseded the board of Dewan Housing Finance Limited (DHFL) and referred the defaulting NBFC to insolvency proceedings—the first such case under special rules notified by the Ministry of Finance.

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