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.

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.”


What is Type 1 and Type 2 NBFC?

Type 1 and Type 2 are two types of NBFCs. While Type 1 NBFCs do not yet have a client interface, Type 2 NBFCs do or plan to have one. Type 1 does not currently enjoy widespread public support, does not plan to do so in the future, and does not intend to. Type 2 NBFCs also go by the name NBFC-NDs.

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