List of Popular NBFC in India

List of Popular NBFC in India

Non-Banking Financial Companies (NBFCs) have emerged as a vital player in India’s financial landscape. Unlike banks, NBFCs cannot accept demand deposits, but they provide credit and other financial services to customers, making them an important source of finance for individuals and businesses. In recent years, several NBFCs have gained widespread popularity, revolutionizing the Indian financial market.

Key Takeaways:

  • Popular NBFCs in India offer a range of financial services, including loans, insurance, and asset management.
  • These companies have gained prominence due to their innovative business models, customer-centric approach, and flexible loan policies.
  • State Bank of India (SBI), HDFC, Bajaj Finance, Indiabulls Housing Finance Limited (IBHFL), and LIC Housing Finance Limited (LICHFL) are some of the prominent NBFCs in India.
  • NBFCs have become an essential part of India’s financial sector and have played a crucial role in promoting financial inclusion and economic growth.
  • The regulatory framework for NBFCs in India is governed by the Reserve Bank of India (RBI) and other regulatory authorities to ensure transparency and stability in the financial sector.

What are NBFCs?

Non-Banking Financial Companies (NBFCs) are financial institutions that provide loans, advances, credit facilities, and other financial services to businesses and individuals, similar to banks, but without a banking license.

They operate under the regulatory framework of the Reserve Bank of India (RBI) and cater to various sectors such as infrastructure, real estate, automobile, and consumer durables.

Unlike banks, NBFCs cannot accept demand deposits or issue checks, but they can accept term deposits, offer lease financing, and provide asset-based financing. They support the economic growth and financial inclusion of the country, complementing the banking sector by filling the gaps in credit delivery and expanding the reach of financial services.

One of the significant advantages of NBFCs is their ability to provide customized products and services that meet the diverse needs of their customers. They offer higher interest rates on deposits and more relaxed eligibility criteria for loans than traditional banks, making them an attractive source of financing for small businesses and borrowers with poor credit scores.

Regulatory Framework for NBFCs in India

In India, Non-Banking Financial Companies (NBFCs) are regulated by the Reserve Bank of India (RBI) under the Reserve Bank of India Act, 1934. The regulatory framework provides guidelines for NBFCs’ operations, capital adequacy, governance, risk management, and compliance.

Recently, the RBI has classified NBFCs into three categories based on their asset size:

  1. Systemically Important Non-Deposit taking NBFCs (NBFCs-ND-SI)
  2. Non-Systemically Important Non-Deposit taking NBFCs (NBFCs-ND-NSI)
  3. Deposit-taking NBFCs (NBFCs-D)

Systemically Important Non-Deposit taking NBFCs (NBFCs-ND-SI) are regulated in a similar manner as banks, while Non-Systemically Important Non-Deposit taking NBFCs (NBFCs-ND-NSI) are subject to less stringent regulations.

The regulatory framework also requires NBFCs to maintain adequate capital adequacy and implement risk management strategies to ensure financial stability. NBFCs are also required to comply with various disclosures and reporting requirements to ensure transparency in their operations.

In addition, the RBI regularly reviews and updates the regulatory framework based on the changing financial landscape and emerging risks in the financial sector to ensure the protection of investors and maintain the stability of the financial system.

State Bank of India (SBI)

The State Bank of India (SBI) is one of the largest banks in India, with a strong presence in the NBFC sector. The SBI has been providing a wide range of financial services to its customers for over 200 years, with a mission to improve the living standards of the people of India.

The SBI has a well-established NBFC arm, providing services such as SME loans, agriculture loans, housing loans, personal loans, and consumer durable loans, among others. The SBI NBFC has been successful in catering to the diverse financial needs of its customers, with flexible interest rates and repayment options.

Moreover, the SBI NBFC has stringent control systems in place to ensure customer satisfaction and regulatory compliance. The NBFC arm has also contributed significantly to the Indian economy, by funding several infrastructure development projects and supporting the growth of small and medium enterprises (SMEs).

Housing Development Finance Corporation Limited (HDFC)

Housing Development Finance Corporation Limited (HDFC) is one of the leading non-banking financial company (NBFC) in India. Founded in 1977, HDFC has been providing financial assistance for home loans and housing finance for more than four decades. With a market capitalization of over INR 5.6 trillion, it is widely recognized for its quality services and reliability.

HDFC offers a wide range of NBFC services including home loans, loan against property, and property construction loans. The company has a strong reputation for its customer-centric approach and has been able to achieve significant growth over the years. HDFC has a pan-India presence with a widespread network of offices to cater to customers in all parts of the country.

Financial Performance

ParameterValue
Net Profit (FY 2020)INR 22,237 crore
Revenue (FY 2020)INR 49,313 crore
Assets Under Management (AUM)INR 5.4 trillion

As seen from the financial results of FY 2020, HDFC has been able to achieve significant growth over the years and has maintained a strong financial position. HDFC’s consistent performance has earned it a strong reputation in the industry and has helped it maintain its position as one of the top NBFCs in India.

The company continues to innovate and expand its product offerings to provide quality services to its customers. HDFC’s commitment to customer satisfaction and its financial stability makes it a top choice for home loans and housing finance in India.

Bajaj Finance Limited (BFL)

Bajaj Finance Limited (BFL) is one of the leading NBFCs in India, providing a range of financial products and services tailored to the needs of its clientele. The non-banking financial company is well-known for its focus on customer satisfaction and has consistently maintained high credit ratings, setting the benchmark for the industry. BFL operates in various segments, including consumer finance, SME finance, commercial lending, fixed deposits, and more.

One of its popular offerings is the consumer finance segment, providing loans for various categories like home appliances, electronics, two-wheelers, consumer durables, and lifestyle products. Bajaj Finserv credit card and EMI network card are other well-known products bringing great value propositions to customers. The company has gained immense popularity across the country, making its innovative offerings easily accessible to customers through its vast network of branches, the web, and mobile applications. BFL has regularly received accolades for its customer service, and the company is dedicated to delivering the best to its customers.

Key Financial Data (FY 20-21)

ParticularsAmount (INR)
Net ProfitRs. 4,433 crores
Total AssetsRs. 1,66,851 crores
Loan BookRs. 1,49,382 crores
Capital Adequacy Ratio26.88%

BFL has shown a steady growth rate through the years, which has made it one of the preferred choices among customers and investors alike.

Indiabulls Housing Finance Limited (IBHFL)

Indiabulls Housing Finance Limited (IBHFL) is a leading Non-Banking Financial Company in India, primarily involved in the housing finance business. The company offers home loansloan against property, and construction finance to individuals and corporate entities. IBHFL started its journey in 2005 and quickly emerged as a trusted name in the NBFC sector. The company has a strong pan-India presence with over 200 branches across the country.

IBHFL has a focused approach towards providing affordable housing finance to individuals in the middle and lower-income groups. The company also caters to the affordable housing segment, which has been a key priority for the government.

As of March 2021, IBHFL’s assets under management (AUM) stood at Rs 1.11 lakh crore, demonstrating the company’s robust growth in the housing finance business. IBHFL’s consistent efforts to prioritize customer satisfaction and expand its product portfolio have made it a popular name in the NBFC industry.

LIC Housing Finance Limited (LICHFL)

LIC Housing Finance Limited (LICHFL) is a leading non-banking financial company (NBFC) based in India. The company is a subsidiary of Life Insurance Corporation of India (LIC) and specializes in providing home loans, loan against property, and corporate loans.

As of March 2021, LICHFL had a loan book of over INR 71,000 crore and a network of 304 marketing offices, including two offices outside India. The company’s primary focus is on the housing sector, and it offers a range of customized solutions to meet the specific needs of its customers.

LICHFL has received various awards and recognitions for its outstanding performance and customer service, including the Business Leader of the Year award at the 2021 NBFC100 Tech Summit.

Mahindra & Mahindra Financial Services Limited (MMFSL)

Mahindra & Mahindra Financial Services Limited (MMFSL) is a well-known Non-Banking Financial Company (NBFC) in India. Established in 1991, MMFSL offers a wide range of financial products and services, including loans for vehicles, tractors, and SMEs, fixed deposits, and insurance.

With a presence in over 27 states and union territories in India and a vast network of branches and customer touchpoints, MMFSL has become a trusted name in the financial sector. MMFSL NBFC primarily caters to the rural and semi-urban markets, providing easy and accessible finance to customers in these areas.

Loan Products by MMFSL NBFC

Loan TypeDescription
Vehicle LoansLoans for purchasing new and used passenger and commercial vehicles.
Tractor LoansLoans for buying new and used tractors for agricultural purposes.
SME LoansLoans for Small and Medium Enterprises (SMEs) for business expansion, working capital, machinery purchase, and more.

MMFSL NBFC’s loan products come with attractive interest rates, easy repayment options, and minimal documentation. The NBFC also has tie-ups with various vehicle and equipment manufacturers, allowing customers to avail of pre-approved loans at the point of sale.

MMFSL has garnered several accolades, including the ‘Best NBFC for Rural Reach’ award at the Dun & Bradstreet BFSI Awards 2021 and the ‘Best CSR Practice in the Agriculture and Rural Development Sector’ award at the National CSR Awards 2020.

“We aim to provide financial products and services to underserved and unserved customers in rural and semi-urban areas of India. Customer satisfaction and social responsibility are our top priorities,” says Mr. Ramesh Iyer, Managing Director of MMFSL.

With a strong focus on customer service and social responsibility, Mahindra & Mahindra Financial Services Limited (MMFSL) has established itself as a leading NBFC in India, catering to the financial needs of customers in the rural and semi-urban markets.

Tata Capital Limited

Tata Capital Limited is a prominent Non-Banking Financial Company (NBFC) in India that offers a wide range of financial services to its customers. The company was established in 2007 and is a subsidiary of Tata Sons Limited. It operates across various segments, including commercial and consumer finance, infrastructure finance, wealth management, and investment banking.

As an NBFC, Tata Capital Limited plays a vital role in providing financial support to the Indian economy. It offers loans and finance solutions to individuals and businesses, thereby helping them to achieve their financial goals. The company has a robust credit rating, which allows it to borrow at competitive rates and, in turn, offer loans at lower interest rates to its customers.

Tata Capital Limited has a strong presence in the Indian market, with over 100 branches spread across the country. The company has a strong customer base and is known for its customer-centric approach. It caters to a broad range of customers, from small and medium-sized enterprises (SMEs) to large corporates.

Products and Services offered by Tata Capital Limited

Tata Capital Limited offers a range of products and services across various business verticals. Some of its popular offerings include:

Product/ServiceDescription
Business LoansTata Capital Limited offers customized business loans to SMEs and large corporates. The loans are tailored to meet the specific financial needs of businesses, such as working capital loans, term loans, and project finance.
Personal LoansThe company offers personal loans for various purposes, such as home renovation, wedding expenses, travel, and medical emergencies. The loans are available at competitive interest rates and with easy repayment options.
Home LoansTata Capital Limited provides home loans for various purposes, such as buying a new house, constructing a new house, and renovating an existing house. The loans are available at competitive interest rates and with easy repayment options.
Wealth ManagementThe company offers comprehensive wealth management services to its clients, including investment solutions, financial planning, and portfolio management.
Investment BankingTata Capital Limited provides investment banking services to corporates, including mergers and acquisitions, debt and equity financing, and capital market transactions.

Tata Capital Limited is a trusted name in the Indian financial market and is known for its innovative products, customer-centric approach, and robust financials. Its NBFC operations have a significant impact on the Indian economy, providing much-needed financial support to individuals and businesses alike.

Aditya Birla Finance Limited (ABFL)

Aditya Birla Finance Limited (ABFL) is a non-banking financial company (NBFC) that offers a range of financial products and services to its customers. ABFL is a subsidiary of Aditya Birla Capital Limited, which is the holding company of the financial services businesses of the Aditya Birla Group.

ABFL provides various types of loans, including personal and business loans, home loans, loans against property, and rural finance. The company has a diverse customer base, including salaried and self-employed individuals, small and medium enterprises (SMEs), large corporates, and rural customers.

ABFL has a pan-India presence with over 350 branches, more than 10,000 direct and indirect employees, and over one million customers. The company’s focus on customer service and innovative digital solutions has helped it become one of the leading NBFCs in India.

Conclusion

In conclusion, NBFCs play a critical role in the Indian financial system by providing financial services to millions of customers who otherwise may not have access to traditional banking services. The popular NBFCs mentioned in this article, including State Bank of IndiaHousing Development Finance Corporation LimitedBajaj Finance LimitedIndiabulls Housing Finance LimitedLIC Housing Finance LimitedMahindra & Mahindra Financial Services Limited, Tata Capital Limited, and Aditya Birla Finance Limited, have established themselves as trusted brands in the market. These companies have a proven track record of providing innovative and reliable financial products and services to their customers.

It is important to note that while NBFCs offer a range of financial products and services, they are not banks and do not have the same level of regulatory oversight. However, the regulatory framework for NBFCs in India has been strengthened in recent years to ensure their stability and protect the interests of consumers. As a result, these popular NBFCs continue to grow and expand their services, contributing to the overall development of India’s financial sector.

Overall, the popularity of NBFCs in India is expected to increase in the coming years, driven by factors such as rising incomes, growing demand for credit, and increased accessibility to financial services. As such, these popular NBFCs will continue to play a crucial role in India’s financial landscape, providing customers with innovative and reliable financial products and services to meet their diverse needs.

FAQ

What are NBFCs?

NBFCs, or Non-Banking Financial Companies, are financial institutions that provide banking services without holding a banking license. They offer a range of services such as lending, credit facilities, investment activities, and wealth management.

What is the regulatory framework for NBFCs in India?

NBFCs in India are regulated and supervised by the Reserve Bank of India (RBI) under the provisions of the Reserve Bank of India Act, 1934. The RBI sets guidelines and regulations to ensure the stability and sound functioning of NBFCs in India.

What is the State Bank of India (SBI) NBFC?

The State Bank of India (SBI) is a leading public sector bank that also operates as an NBFC. The SBI NBFC offers a wide range of financial services, including loans, investment products, insurance, and asset management services.

What is the Housing Development Finance Corporation Limited (HDFC) NBFC?

The Housing Development Finance Corporation Limited (HDFC) is a prominent NBFC in India. HDFC NBFC specializes in housing finance and offers various loan products, including home loans, home improvement loans, and loans for the purchase of commercial properties.

What is Bajaj Finance Limited (BFL) NBFC?

Bajaj Finance Limited (BFL) is a leading NBFC in India. BFL NBFC provides a wide range of financial services, including consumer finance, SME loans, commercial lending, and investments. BFL is known for its competitive interest rates and quick loan approvals.

What is Indiabulls Housing Finance Limited (IBHFL) NBFC?

Indiabulls Housing Finance Limited (IBHFL) is a prominent NBFC in India that specializes in housing finance. IBHFL NBFC offers various home loan products, loan against property, and real estate advisory services. They cater to both individual homebuyers and developers.

What is LIC Housing Finance Limited (LICHFL) NBFC?

LIC Housing Finance Limited (LICHFL) is an NBFC that operates under the umbrella of Life Insurance Corporation of India (LIC). LICHFL NBFC specializes in providing housing finance solutions and offers various home loan products tailored to different customer needs.

What is Mahindra & Mahindra Financial Services Limited (MMFSL) NBFC?

Mahindra & Mahindra Financial Services Limited (MMFSL) is a leading NBFC in India. MMFSL NBFC offers a wide range of financial services, including vehicle loans, equipment loans, working capital financing, and insurance solutions. They primarily cater to the automotive and rural sectors.

What is Tata Capital Limited NBFC?

Tata Capital Limited is an NBFC that operates as a subsidiary of Tata Sons Limited. Tata Capital NBFC provides a wide range of financial products and services, including consumer loans, business loans, wealth management, and investment advisory services to individuals and corporate customers.

What is Aditya Birla Finance Limited (ABFL) NBFC?

Aditya Birla Finance Limited (ABFL) is a prominent NBFC in India. ABFL NBFC offers a comprehensive range of financial services, including corporate lending, structured finance, capital market financing, wealth management, and mortgage loans. They cater to diverse customer segments.

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