In India, NBFCs or Non-Banking Financial Companies does not depend on Current Account Savings Account (CASA) to raise the money because the CASA deposits are only for banks. Whereas the Reserve Bank of India (RBI) provides licenses to the banks to accept the funds from the public which means all the Non-Banking Financial Companies have to look for an alternative source of money supply, and these are higher than the traditional deposits taken by banks. The rate of interest is in between 4% to 6%. In this blog, we discuss the methods use by Non-Banking Financial companies to raise money in India.
What is the business model of NBFCs in India?
Non-Banking Financial Companies raise funds are high, whereas the banks raise the money supply at a very low rate, and these financial companies end up raising funds at a higher rate of interest. As a result, they are causing the obstacle rate on their funds to increase proportionally to maintain Net Interest Margin between 1 to 3% which causes Non-Banking Financial Companies to take an alternative method for distribution of funds to create a higher return.
Effectiveness of Fund Raising
Following are two main objectives of raising funds are:
What are the different KPIs in assessing Liability/Asset in an NBFC?
The departments of the treasury and rupee resources depend on the following factors:
Following are the different sources of funds for any Non-Banking Financial Companies:
Following are some services which are offered by the Non-Banking Financial Companies that have access to the automatic route in FDI:
Most of the NBFCs don't rely on Current Account Savings Account deposits to raise resources as CASA deposits are for banks only. This means Non-Banking Financial Companies have to consider alternate sources of the money supply. These primary sources of funds are essential for NBFCs. In case if you have any legal-related queries, then feel free to contact Enterslice. Our professional experts are readily available to solve your questions.