As per the survey reads India is the second largest populated country in the world. The population consists of rural and urban parts of the country. According to the Census conducted in 2011, nearly 70% of the country’s population lives in rural areas where, unemployment is an issue. The growing population is very crucial for the country’s economy. As the rural population is so high it’s a task to sustain the economy. But with changing times, the rural India has fought back many odds and emerged stronger. Many stories of young entrepreneurs from the rural regions are appreciated and applauded. With limited resources and knowledge, entrepreneurs started running small businesses and are achieving new goals every day. This was possible with the help of Non-Banking Financial Companies (NBFCs).
Non-Banking Financial Companies has flourished in the recent times. NBFCs are financial institutes not holding a business license. The fact that it provides banking services that is not abiding the legal definition of a bank is the reason it catches attention of many. The impact and growth set by NBFC have given rise to organizations ready to invest in it. Establishment of such organizations has majorly helped the economically weaker section of society. Due to the various benefits provided by NBFC, it has become a platform for women entrepreneurs to build up their business.
NBFCs is registered under the Companies Act, www.years.it is divided into two main categories which include NBFCs accepting public deposit and NBFCs not accepting public deposit .The services provided by NBFCs are unlimited. NBFCs include Asset Finance, Investment, Loan, Infrastructure Finance, Systemically Important Core Investment, Infrastructure Debt Fund and Non-Banking Financial Company-Micro Finance Institution.
Protocols to Run the System
NBFC must be registered with the Reserve Bank of India (RBI) and have fixed legal authorization to accept deposits from the public. It is obliged to exhibit the Certificate of Registration or a certified copy at the registered office. The registration of NBFC with the RBI solely authorizes it to regulate the business of NBFC.RBI is not responsible for the repayment of deposits approved by NBFCs. NBFCs is strictly forbidden from using the name of RBI in any manner while regulating their business. The Certificate of Registration is an application which is requested by NBFCs .If the Certificate of Registration gets rejected or cancelled by the RBI then it does not authorize to accept new deposits or renew existing deposits.
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