“COMPARATIVE STUDY OF NBFC AND ITS ROLE IN INDIAN ECONOMY”
Submitted To: Submitted By: Dr. Kavita Chavali AARLA SIREESHA 10SBCMO125 FINANCE C
Bangalore
ALLIANCE UNIVERSITY SCHOOL OF BUSINESS Page 1
INTRODUCTION
Non-banking Financial Institutions carry out financing activities but their resources are not directly obtained from the savers as debt. Instead, these Institutions mobilize the public savings for rendering other financial services including investment. All such Institutions are financial intermediaries and when they lend, they are known as Non-Banking Financial Intermediaries (NBFIs) or Investment Institutions. Apart from these NBFIs, another part of Indian financial system consists of a large number of privately owned, decentralized, and relatively small-sized financial intermediaries. Most work in different, miniscule niches and make the market more broad-based and competitive. While some of them restrict themselves to fund-based business, many others provide financial services of various types. The entities of the former type are termed as "non-bank financial companies (nbfcs)".
A robust banking and financial sector is critical for activating the economy and facilitating higher economic growth. Financial intermediaries like NBFCs have a definite and very important role in the financial sector, particularly in a developing economy like India. They are a vital link in the system. They have access to larger markets and provide financing for almost all activities.
After the proliferation phase of 1980s and early 90s, the NBFCs witnessed consolidation and now the number of NBFCs eligible to accept deposits is around 600, down from 40000 in early 1990s. The number of asset financing NBFCs would be even lower, around 350, the rest are investment and loan
