What is Type 1 and Type 2 NBFC?

Type 1 – NBFC-ND are the NBFC’s which do not intend to have a customer interface in the future, not having customer interface, not intending to accept public funds in the future and not accepting public funds currently.You can read about the Types of Non Banking Financial Institutions – Functions & Objectives in the given link.

Type 2 – NBFC-ND are the NBFC’s intending to have a customer interface in the future or currently having a customer interface, intending to accept public funds in the future or accepting public funds currently.

Further readings:

1. NBFCs & IBC: RSTV – Big Picture Discussion on the RBI’s move to resolve NBFCs under insolvency law
2. Insolvency And Bankruptcy Code (IBC) – IBC Amendment Bill 2021 [UPSC Notes GS III]