NBFC (Non-Banking Financial Companies) are financial institutions regulated by RBI and are registered under the Companies Act, of 1956. NBFC offer loans, credit facilities, investments in shares and bonds, leasing, and insurance. Unlike banks, NBFCs do not hold a banking license. To be classified as an NBFC, a company must have over 50% of its assets and income from financial activities. They are essential in extending financial services, especially to sectors like SMEs (small and medium enterprises) in the Indian financial system.