What are Non-bank financial companies (NBFCs) ?

Defination:

Non-banking financial companies, or NBFCs, are financial institutions that provide banking services, but do not hold a banking license.
These institutions are not allowed to take deposits from the public depending on the jurisdiction. Nonetheless, all operations of these institutions are still covered under banking regulations.
They do offer all sorts of banking services, such as loans and credit facilities, retirement planning, money markets, underwriting, and merger activites.
The number of non-banking financial companies has expanded greatly in the last several years as venture capital companies, retail and industrial companies have entered the lending business.
A company can only call itself a bank if it is a registered as such with the nation's central bank.

NBFCs have been divided into two categories.

1. Category 'A' companies (NBFCs accepting public deposits or NBFCs-D)
2. Category 'B' companies (NBFCs not raising public deposits or NBFCs-ND
These institutions typically are restricted from taking deposits from the public.