Question

NBFC is a commonly used in finance sector. What does NBFC stands for? 

A New Business Finance Company Correct Answer Incorrect Answer
B New Banking Finance Company Correct Answer Incorrect Answer
C Non-Business Finance Company Correct Answer Incorrect Answer
D Non-Business Fund and Credit Correct Answer Incorrect Answer
E None of the above Correct Answer Incorrect Answer

Solution

A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/stocks/bonds, leasing, hire-purchase, insurance business, chit business. Financial activity as principal business is when a company’s financial assets constitute more than 50 per cent of the total assets and income from financial assets constitute more than 50 per cent of the gross income.

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