NBFC
Also called Non-banking financial company
A non-bank finance company: a lender regulated by the RBI that is not a bank.
NBFC stands for non-banking financial company. It’s a lender that the RBI regulates but that isn’t a bank. Many loans you see on apps, from small personal loans to buy-now-pay-later credit, are actually given by an NBFC working behind the app. The key difference for you: an NBFC can’t give you a savings account, and money you deposit with one is not covered by DICGC deposit insurance.
Questions people ask
What is the full form of NBFC?
NBFC stands for non-banking financial company. It's a company that lends money or offers other financial services and is regulated by the RBI, but it is not a bank.
How is an NBFC different from a bank?
An NBFC can lend, but it can't offer you a savings or current account or issue cheques drawn on itself, which banks can. Deposits with an NBFC are also not covered by the DICGC deposit insurance that protects bank deposits.
How do I check if an NBFC is genuine?
Look the company up on the RBI website, which publishes the lenders it regulates. If a loan app or lender won't name the regulated company behind it, treat that as a warning sign.
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