nbfi lectures.pdf

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5/23/201

Non Banking Financial

Institutions (BNFI)

Definition:

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. Nonetheless, all

operations of these institutions are still covered

under banking regulations. NBFCs do offer all

sorts of banking services, such as loans and

credit facilities, retirement planning, money

markets, underwriting, and merger activities.

Definition Con--d

Non Bank Financial Institutions (FIs) are those types of

financial institutions which are regulated under Financial

Institution Act, 1993 and controlled by Bangladesh Bank.

Now, 31 FIs are operating in Bangladesh while the

maiden one was established in 1981.

Out of the total, 2 is fully government owned, 1 is the

subsidiary of a SOCB, 13 were initiated by privatedomestic initiative and 15 were initiated by joint venture

initiative. Major sources of funds of FIs are Term Deposit

(at least six months tenure), Credit Facil ity from Banks

and other FIs, Call Money as well as Bond and

Securitization.

Difference between Banking and non

Banking Financial Institution

The major difference between banks and FIs are as

follows:

FIs cannot issue cheques, pay-orders or demand

drafts.

FIs cannot receive demand deposits,

FIs cannot be involved in foreign exchange

financing,

FIs can conduct their business operations with

diversified financing modes like syndicated

financing, bridge financing, lease financing,

securitization instruments, private placement of

equity etc.


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Difference between Banking and nonBanking Financial Institution

Others include:-

A Bank is an organization that accepts customer cash

deposits and then provides financial services like bank

accounts, loans, share trading account, mutual funds, etc.

A NBFC (Non Banking Financial Company) is an

organization that does not accept customer cash deposits

but provides all financial services except bank accounts.

Difference between Banking and nonBanking Financial Institution Con--d

The basic difference may include:-

A bank indulges in a number of activities relating to

finance with a range of customers, while an NBFI is

mainly concerned with the term loan needs of large

enterprises

A bank deals with both internal and international

customers while an NBFI is mainly concerned with the

finances of foreign companies

A bank's main interest is to help in business transactions

and savings/investment activities while an NBFI's main

interest is in the stabilization of the currency

Product & Services of NBFI

Financing and Investment Product

Lease finance, Term finance, Project finance,

corporate finance, Lease finance, Bridge finance,

Car finance, personal loan, student loan,

Professional loan, venture capital

Capital Market Services IPO management, Right issue management,

Underwriting, portfolio management, Equity

investment

Product & Services of NBFI Co-d

Deposit Product

Fixed term deposit, Monthly income deposit, Period

income deposit, Double money deposit, Monthly

saving scheme etc


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List of Non banking financial

institutions in Bangladesh

Non-banking financial institutions

1. Uttara Finance and Investments Limited

2. United Leasing Company Limited (ULCL)

3. Union Capital Limited

4. The UAE-Bangladesh Investment Co. Ltd

5. Saudi-Bangladesh Industrial & Agricultural Investment

Company Limited (SABINCO)

6. Reliance Finance Limited

7. Prime Finance & Investment Ltd

8. Premier Leasing & Finance Limited

9. Phoenix Finance and Investments Limited

10. People's Leasing and Financial Services Ltd

11. National Housing Finance and Investments Limited

12. National Finance Ltd



13. MIDAS Financing Ltd. (MFL)

14. LankaBangla Finance Ltd.

15. Islamic Finance and Investment Limited

16. International Leasing and Financial Services Limited

17. Infrastructure Development Company Limited

(IDCOL)

18. Industrial Promotion and Development Company of

Bangladesh Limited(IPDC)

19. Industrial and Infrastructure Development Finance

Company (IIDFC) Limited

20. IDLC Finance Limited

21. Hajj Finance Company Limited

22. GSP Finance Company (Bangladesh) Limited

(GSPB)



23. First Lease Finance & Investment Ltd.

24. FAS Finance & Investment Limited

25. Fareast Finance & Investment Limited

26. Delta Brac Housing Finance Corporation Ltd.

(DBH)

27. Bay Leasing & Investment Limited

28. Bangladesh Industrial Finance Company Limited

(BIFC)29. Bangladesh Finance & Investment Co. Ltd.

30. Agrani SME Finance Co. Ltd.

31. CAPM Venture Capital and Finance Limited

Among these 23 are listed with the DSE.

Regulatory Framework of NBFIs

Financial Statements

Annual report Reference

See page 156

Point: 2.01 to 2.05 of this

annual report


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IDLC Annual report

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