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What is Type 1 and Type 2 NBFC?

By BYJU'S Exam Prep

Updated on: November 9th, 2023

Type 1 and Type 2 NBFCs – Type 1 NBFCs currently have no customer interface, do not plan to have one in the future, do not currently receive public funding, and do not plan to do so. Type 2 NBFCs – NBFCs – ND – are NBFCs that already have or are planning to have a client interface, as well as those that are planning to receive public funding soon.

Table of content

1. Type 1 and Type 2 NBFC
2. Registration Process For NBFC
3. What is Type 1 and Type 2 NBFC?

Type 1 and Type 2 NBFC

A Non-Banking Financial Company (NBFC) is a business registered under the Companies Act of 1956. They engage in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by the government or a local authority, or other marketable securities.

It excludes institutions whose main line of business is that of agriculture activity, industrial activity, purchase, or sale.

Registration Process For NBFC

Companies that want to register as NBFCs must submit an online application as well as a hard copy of their registration application as well as all required supporting documents to a regional office of the Reserve Bank of India.
You can submit an online application by going to the RBI’s safe website.
On the login page for the COSMOS Application, click “CLICK” for Company Registration.
In a window that could be downloaded, the Excel application form would be displayed.
The company can then visit the website to download, complete, and upload the relevant NBFC application form.
The company might be able to recall to enter the correct name of the Regional Office in the field “C-8” of “Annex-I.”

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