Explanation:

The working and operations of NBFCs are regulated by the Reserve Bank of India (RBI) within the framework of the [Reserve Bank of India Act, 1934] 
Non-bank financial companies(NBFCs) are financial institutions that provide banking services without meeting the legal definition of a bank, i.e. one that does not hold abanking license. NBFCs include a loan company, an investment company, asset finance
company ( i.e. a company conducting the business of equipment leasing or hire purchase finance) and Residuary Non- Banking Companies. NBFCs are incorporated under the Companies Act, 1956.