Q. Which of the following is/are classified under the NBFCs (Non-Banking Financial Companies)?
1.Asset Finance Company (AFC)
2.Investment Company (IC)
3.Loan Company (LC)
Choose the correct answer from below given codes:

[A] 1 only

[B] 1 and 2 only

[C] 2 and 3 only

[D] 1, 2 and 3

Answer: D

Explanation: The NBFCs have been reclassified into three categories:

  1. Asset Finance Company (AFC)
  2. Investment Company (IC) and
  3. Loan Company (LC).

Under this classification, an AFC is defined as a financial institution whose principal business is that of financing the physical assets, which support various productive and economic activities in the country.

Such NBFCs are supposed to play a very vital role in financing infrastructure projects in 2016– 17, as per the Government of India.

Source: Ramesh Singh