Non-Banking Financial Companies (NBFCs)
RBI Regulatory Framework
NBFCs are financial institutions registered under the Companies Act that provide banking services (loans, advances, acquisition of shares, bonds) without holding a banking licence. The RBI regulates NBFCs under Chapter IIIB of the RBI Act, 1934. In October 2021, the RBI introduced a scale-based regulatory framework classifying NBFCs into four layers: Base Layer (NBFC-BL), Middle Layer (NBFC-ML), Upper Layer (NBFC-UL), and Top Layer (NBFC-TL).
- RBI Act, Chapter IIIB (Sections 45-I to 45-QA): registration, regulation, and supervision of NBFCs
- Scale-based regulation (October 2021): four-tier structure based on size, activity, and systemic risk
- Upper Layer: NBFCs specifically identified by RBI based on scoring methodology; Top Layer: currently kept empty, reserved for NBFCs posing extreme systemic risk
- PFC and REC are both classified as Infrastructure Finance Companies (NBFC-IFC) under RBI norms
- NBFC-IFC criteria: minimum 75% of total assets deployed in infrastructure loans, minimum net owned fund of Rs 300 crore
- Key difference from banks: NBFCs cannot accept demand deposits, are not part of the payment and settlement system, and do not have deposit insurance
● Tracked since February 12, 2026 · last seen August 19, 2026 · updates as the daily brief publishes
See it in today’s brief.
Daily current affairs with every static concept explained in place.
Read the daily brief