WHAT IS NON BANKING FINANCIAL INSTITUTION?

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A Non Banking Financial Institution/ Non Banking Financial Intermediary has different definitions in different countries:

·         Any institution, which is not a bank but is involved in finance 

·         Financial institutions not taking demand deposits

·         Financial institutions not taking any deposit

 

 

 

 

NBFIs are different types of financial institutions that provide the following types of services

• Payments

• Liquidity / credit

•Divisibility: break up large denomination and aggregate small denomination

 • Store of value

 • Information: processing and assessing risks

• Risk pooling: lower the risks of investors

 

     Many NBFI provide services that are also provided by banks, hence the distinctionbetween banks and NBFI has become blurred. 

 Many NBFI belong to supervised conglomerates (or conglomerates that should be supervised).