Non-Banking Finance Company
Also written NBFC · Non-Banking Finance Company (NBFC) · Non-Banking Financial Company
A financial institution — grouped by the booklet with commercial banks under RBI supervision — whose deposit-mobilisation activity, when it goes wrong, is a Reserve Bank of India grievance, not a SEBI one.
In plain language
A SEBI investor booklet could easily leave the impression that SEBI handles every financial complaint. Chapter 13 exists to correct exactly that impression.
Chapter 13 gives a table. The table sends each kind of complaint to the regulator actually responsible for it.
The table's first row is Non-Banking Finance Companies (NBFCs). A complaint about an NBFC taking deposits goes to the Reserve Bank of India. It does not go to SEBI.
Chapter 4 also mentions NBFCs. It groups them with commercial banks and other financial institutions, all under the RBI's supervision. So an NBFC sits alongside a bank in India's financial system. But an NBFC is not a bank, and a deposit complaint against one is not SEBI's subject.
How it works
Chapter 13's own words on the first row: "Mobilization of Deposits by Non-Banking Finance Companies" is routed to the Reserve Bank of India. Chapter 4 describes India's financial sector, under the RBI's consolidated supervision, as made up of "commercial banks, financial institutions and nonbanking finance companies."
Chapter 13's grievance-redressal table lists categories of activity against the authority responsible for them. NBFC deposit mobilisation is item 1 of 13 rows, and the table is useful precisely because the other rows send look-alike complaints elsewhere:
| Activity | Authority |
|---|---|
| Mobilisation of deposits by NBFCs | Reserve Bank of India |
| Nidhi or mutual benefit society | Reserve Bank of India |
| Deposits accepted by companies under Section 73 of the Companies Act | Ministry of Corporate Affairs |
| Chit fund business | State Governments |
| Contract of insurance | IRDAI |
| Grievances against companies and intermediaries in the securities market | SEBI, via www.scores.gov.in |
SEBI's own row carries the two toll-free helpline numbers the chapter gives — 1800 266 7575 and 1800 22 7575 — for grievances that are genuinely SEBI's: complaints against listed companies and securities-market intermediaries, not against an NBFC.
A worked example
Mrs Kamala Subramaniam of Coimbatore placed Rs 5,00,000 as a fixed deposit with Sannidhi Finvest, an NBFC, on the promise of a high interest rate. At maturity the company delays repayment for months, offering no explanation.
She first calls the SEBI helpline numbers she has seen on television — 1800 266 7575. That is the wrong door: her grievance is about deposit mobilisation by an NBFC, which Chapter 13's table sends to the Reserve Bank of India, not SEBI. SEBI's SCORES portal is for grievances against listed companies and securities market intermediaries.
Her neighbour, separately, has a complaint against a stockbroker who has not released his shares after selling them — that one does belong on www.scores.gov.in, using the very same helpline numbers Mrs Subramaniam dialled by mistake.
The lesson the chapter is built to teach: knowing an entity is a financial company is not enough to know who to complain to. What matters is which activity the complaint is about, and NBFC deposit-taking is the Reserve Bank's activity to supervise.
Why NISM asks about it
Chapter 13 (Grievance Redressal Agencies) is a short, table-driven chapter built entirely around matching an activity to its regulator, and NBFC deposit mobilisation is its first row — deliberately, since it is the complaint an investor is most likely to wrongly bring to SEBI. Chapter 4's mention of NBFCs under RBI's consolidated supervision is the only other place the term appears. Expect a matching question: which authority handles a grievance about an NBFC's deposits (RBI), and a distractor offering SEBI.
Common exam traps
- An NBFC is not a bank, even though Chapter 4 mentions both together under RBI supervision — the table treats them as separate rows for separate reasons; only NBFC deposit-taking is listed here.
- NBFC deposit grievances go to RBI, not SEBI, even though this is a SEBI investor-awareness booklet — the whole point of Chapter 13 is that SEBI is not the regulator for everything.
- Nidhi and mutual benefit societies are also RBI's table row, but a separate one from NBFCs — do not merge the two into one line item.
- Housing finance institutions have their own row, the National Housing Bank — do not answer "RBI" for a housing-finance grievance even though NHB is RBI-linked; the table gives it a distinct entry.
- Company deposits under Section 73 of the Companies Act go to the Ministry of Corporate Affairs, not the RBI, even though both are "deposits" in everyday language.
- The booklet does not state NBFC registration or classification rules — only where a deposit-related grievance is directed.
Where this is taught
Free preparation for NISM Series SEBI-ICERelated terms
- IRDAIThe Insurance Regulatory and Development Authority of India, the regulator of India's insurance sector. It protects policyholders' interests and handles grievances on insurance contracts and ULIPs.
- Reserve Bank of IndiaIndia's central bank, set up on April 1, 1935 under the RBI Act. It runs monetary policy, regulates and supervises banks and NBFCs, is banker to the Government and lender of last resort.
- Securities and Exchange Board of IndiaThe statutory regulator of India's securities market, set up under the SEBI Act, 1992, to protect investors and to develop and regulate the market. It registers brokers, DPs and mutual funds.
- Hire purchaseAn agreement to buy an asset through an initial payment followed by instalments, with ownership passing to the buyer only once the final instalment is paid — unlike a lease, where the lessor stays the owner throughout.
- Housing Finance CompanyA company whose primary business is lending for the purchase of property or real estate, regulated by the Reserve Bank of India after that role moved from the National Housing Bank.