What is an NBFC, with examples?

By Yamm Labs · Updated September 2026 · 5 min read

A shopkeeper in Indore needs a few lakh rupees to stock up before Diwali. His bank wants six months of paperwork. A lending app on his phone shows an offer in minutes, and the small print under the amount names a company he has never heard of, a finance company registered with the Reserve Bank of India. That company is an NBFC. It is the lender, not the app. So what is an NBFC, and why does knowing the answer change how both of them should be branded?

What makes a company an NBFC and not a bank?

RBI treats a company as an NBFC when financial activity is its principal business. RBI’s test has two parts: financial assets must be more than half of the company’s total assets, and income from those assets must be more than half of its gross income. A company that passes this test needs a Certificate of Registration from RBI before it can carry on that business. A company whose main business is farming, manufacturing, trading goods, services or real estate is not an NBFC, even if it lends on the side.

The line between an NBFC and a bank is drawn by what an NBFC may not do. The table sets out the three differences RBI itself lists.

Source for the definitions and differences: RBI’s FAQs on NBFCs.

Which companies are examples of NBFCs in India?

The clearest public list of large NBFCs is the one RBI publishes for its Upper Layer, the NBFCs it subjects to enhanced regulatory requirements. The list RBI released in August 2026 for 2026-27 names, among others:

Bajaj Finance, Shriram Finance, Tata Capital, Muthoot Finance, Cholamandalam Investment and Finance Company, Mahindra and Mahindra Financial Services, L&T Finance, HDB Financial Services, Piramal Finance, LIC Housing Finance, Bajaj Housing Finance, REC, Power Finance Corporation, Indian Railway Finance Corporation and Housing and Urban Development Corporation.

The names show how wide the category is. The list runs from household names in consumer credit to housing financiers and to Power Finance Corporation and Indian Railway Finance Corporation. All of them are NBFCs.

You can read the full list in RBI’s press release on the 2026-27 Upper Layer. Beyond these large names, many smaller NBFCs lend in single states, single products or single customer segments.

An NBFC can lend like a bank, but it has to earn trust without a savings account, a cheque book or deposit insurance behind it.

What types of NBFCs does RBI recognise?

RBI sorts NBFCs in two ways. By activity, it recognises types such as housing finance companies, infrastructure finance companies, microfinance institutions, factors, mortgage guarantee companies, standalone primary dealers, account aggregators and peer-to-peer lending platforms. By size and risk, its scale-based regulation places every NBFC in one of four layers: Base, Middle, Upper and Top. The higher the layer, the tighter the rules on capital, governance and disclosure.

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For a buyer of marketing or brand work, the type matters more than the layer. A microfinance lender, a gold loan company and an account aggregator face different customers, different fears and different disclosure rules, so their brands should not look or speak alike.

How do RBI’s rules change the way an NBFC is marketed?

RBI does not write an NBFC’s taglines, but its lending rules decide the order in which a borrower sees things. Three rules shape the screen sequence of any digital loan journey.

• Name the lender on the offer. Where a lending app shows loan offers from more than one lender, RBI’s digital lending directions require it to show the name of each regulated lender making an offer, next to the amount, tenor and annual percentage rate. If a fintech app sources the loan, the NBFC’s name belongs on that screen, legible, not tucked behind a link.
• Show the Key Facts Statement before the signature. RBI requires lenders to give borrowers a Key Facts Statement, including the annual percentage rate, before the loan contract is executed. It applies to retail and MSME term loans sanctioned from 1 October 2024. The design decision: the KFS is its own screen, placed before the e-sign step, and the APR on it matches the APR in the ad.
• Tell the borrower how to exit. The same directions give digital borrowers an option to exit the loan without penalty during a cooling-off period, set by the lender’s board and not shorter than one day. The confirmation screen and welcome message are where that option belongs.

The full text is in RBI’s Digital Lending Directions, 2025. For more questions of this kind, see our NBFC marketing questions answered hub and our advertising rules FAQ for BFSI marketers.

What should a buyer decide first when branding an NBFC?

Decide which name the borrower should trust. Some NBFCs lend under their own brand. Others lend through fintech partners whose app the borrower sees first. In the second case the partner brand and the NBFC’s name will appear together across the loan journey, so the relationship between the two logos is best settled once, as a lockup rule, not redrawn campaign by campaign. After that, set the disclosure hierarchy: APR and lender name at the same visual weight as the headline benefit. Agencies that treat these as design inputs, not legal footnotes, are the ones worth shortlisting. Our page on fintech branding in India explains how we approach it.

A worked example: the Indore loan, screen by screen

Go back to the shopkeeper in Indore and his Diwali stock loan. The rules above turn his few minutes on the app into a sequence of screens, and each one has a brand decision inside it.

The offer screen. He sees an amount, a tenor and an annual percentage rate. If the app shows offers from more than one lender, each offer carries the name of the regulated lender making it. The NBFC’s name sits beside the numbers, readable at a glance, not behind a link.

The Key Facts Statement. Before he signs, he gets a Key Facts Statement with the APR on it. This is its own screen, placed before the e-sign step. The APR matches the figure on the offer and in any ad that brought him to the app.

The confirmation and welcome. After the loan is booked, the confirmation screen and welcome message tell him how to exit without penalty during the cooling-off period. The NBFC’s name appears again here, because it is the lender he now owes.

At no point does the app pretend to be a bank. It cannot offer him a savings account or a cheque book, and it does not need to. The brand’s job is to make the lender’s name, the cost and the exit as clear as the speed of the offer.

Common mistakes when explaining or branding an NBFC

Most problems come from blurring the line between an NBFC and a bank, or between the NBFC and the app that sells its loans. These are the ones we see most often.

• Borrowing bank language. Words such as “account” or “deposit” suggest services an NBFC cannot offer in the way a bank does. Say what the company does: it lends.
• Hiding the lender’s name. A partner app that shows only its own logo leaves the borrower unsure who lent the money. Where offers from several lenders are shown, RBI requires each lender’s name.
• An APR that changes between screens. The ad, the offer and the Key Facts Statement should show the same figure. A mismatch reads as a bait and switch.
• Treating the KFS as a document to download. It is a screen in the journey, placed before the signature.
• Forgetting the exit. The cooling-off option belongs on the confirmation screen and in the welcome message, not only in the terms.
• Styling every NBFC alike. A gold loan company, a housing financier and an account aggregator serve different people with different fears. One template does not fit all.

A step-by-step checklist before an NBFC brand goes live

This order keeps the regulated parts in view from the first mood board rather than the last review.

1. Confirm the entity. Record the NBFC’s registered name as it appears on its RBI Certificate of Registration, and its type.
2. Decide whose name the borrower trusts. The NBFC’s own brand, a partner’s brand, or both in a set lockup.
3. Write the lockup rule. How the partner logo and the NBFC’s name appear together, and at what size, on every screen and in every ad.
4. Set the disclosure hierarchy. APR and lender name at the same visual weight as the headline benefit.
5. Design the three regulated screens. The offer screen, the Key Facts Statement before e-sign, and the confirmation with the exit option.
6. Check the words. Remove any copy that suggests bank-only services or deposit insurance.
7. Review with compliance. Walk the whole journey, screen by screen, with the person who signs off.

RBI revises its directions from time to time. Confirm the current text with your compliance team before any screen or campaign goes live.

How to brief an agency on NBFC branding

A clear brief saves a round of rework. Send these with the request:

• The NBFC’s registered name, its type and the products it lends.
• Whether it lends under its own brand, through partners, or both.
• The customers it serves and the fear each one brings, for example a first-time borrower or a small business owner before a festival season.
• The screens and channels in scope: app, web, ads, app store listing.
• Who in compliance reviews the work and how long a review takes.

Ask the agency to show the offer screen and the Key Facts Statement in its first round, beside the hero work. An agency that leaves them for later is treating them as legal footnotes, and that is where rework starts.

People also ask

What is an NBFC in simple words?

An NBFC is a company that lends money or does other financial business, registered with and regulated by the Reserve Bank of India, but which is not a bank. It can give loans, yet it cannot offer savings or current accounts, cannot issue cheques drawn on itself and its deposits are not covered by DICGC insurance. Bajaj Finance and Muthoot Finance are two well-known examples.

Is Bajaj Finance a bank or an NBFC?

Bajaj Finance is an NBFC, not a bank. RBI names Bajaj Finance Limited in its list of Upper Layer NBFCs for 2026-27, so it lends under RBI’s NBFC rules and cannot offer savings or current accounts.

Can an NBFC accept deposits from the public?

An NBFC cannot accept demand deposits such as savings or current accounts. Some NBFCs are permitted by RBI to take fixed or term deposits, but DICGC deposit insurance does not cover them. That is the main reason a depositor should treat an NBFC deposit differently from a bank deposit.

Is a lending app the same as an NBFC?

Not always. Many lending apps are lending service providers that source borrowers for a bank or NBFC, and the Key Facts Statement and sanction letter come on the regulated lender’s letterhead. If the app does not name its lender, that is a warning sign.

What are the four layers of NBFC regulation?

Under RBI’s scale-based regulation, every NBFC sits in one of four layers: Base, Middle, Upper and Top. The layer depends on size and risk, and the higher the layer, the tighter the rules on capital, governance and disclosure. RBI publishes the Upper Layer list each year; the 2026-27 list includes Bajaj Finance, Shriram Finance and Tata Capital.

How is an NBFC different from a bank for a borrower?

For a loan, the experience can feel similar: an offer, a Key Facts Statement with the APR, and a signature. The differences show up elsewhere. An NBFC cannot give the borrower a savings or current account or a cheque book, and it is not part of the payment and settlement system. It lends under RBI’s NBFC rules rather than as a bank.

Are housing finance companies NBFCs?

Yes. RBI lists housing finance companies among the types of NBFC it recognises, alongside infrastructure finance companies, microfinance institutions, factors and others. LIC Housing Finance and Bajaj Housing Finance both appear on RBI’s 2026-27 Upper Layer list, which shows that some of the largest housing lenders in India are NBFCs.

How can a borrower check that a lender is a registered NBFC?

Start with the name. A lending app should name the regulated lender on the offer, and the Key Facts Statement and sanction letter should carry that lender’s letterhead. The borrower can then look the company up on the Reserve Bank of India’s website, which publishes lists of registered NBFCs. If no lender is named at all, treat that as a warning sign.

Why do fintech apps partner with NBFCs?

Because the NBFC holds the RBI registration that lending requires. Many apps act as lending service providers: they find and onboard borrowers, while the bank or NBFC makes the loan. That is why the lender’s name has to appear in the journey, and why the partner brand and the NBFC’s name need one agreed lockup rule.