Explain Non-banking Financial Company (NBFC)?

The Non-Banking Financial Companies are mainly involved in the business of loans, advances, acquisition of shares/stocks/bonds/securities/debentures that are issued by the Government. The NBFC companies are registered under the Companies Act, 1956. They are like a bank as they lend and make investments bu there are some significant differences between them. The NBFC companies cannot accept demand deposits and do not form part of the payment and settlement system. They also cannot issue cheques drawn on itself. These companies are regulated by the Reserve Bank of India (RBI) within the framework of the RBI Act, 1934 and the directions issued by it.