1. What is a Non-Banking Financial Company (NBFC)? A Non-Banking Financial Company (NBFC) is a business entity that is registered under the Companies Act of 1956 and is involved in the following activities: lending and advances; purchasing shares, stocks, bonds, debentures, or other marketable securities issued by the government or local authority; leasing; hire-purchase; insurance; and chit business. However, this definition excludes any institution whose primary business is engaged in agriculture, industry, the purchase or sale of any goods (other than securities); providing any services; or selling, purchasing, or building of real estate. A non-banking financial company (Residuary non-banking company) is any corporation whose primary activity is accepting deposits under any scheme or arrangement, either in one lump payment or in installments through contributions or in any other way. 2. What does conducting financial activity as “principal business” mean? When a corporation's ...