Business and Personal Finance Dictionary

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• NON-BANK FINANCIAL INSTITUTION
  
  Any institution which is not a bank as defined by legislation but is involved in finance, such as investment banks, merchant banks, finance companies, building societies, credit unions and life offices. Some, such as merchant banks and finance companies, were often established or acquired by banks (before the early 1980s) as back-door entry to activities disallowed under tight banking legislation. With deregulation of the financial system, the distinctions between banking and non-bank functions became blurred. However, specific supervision of non-banks became formalised in 1993 with the creation in 1993 of a regulatory body, the Australian Financial Institutions Commission, with responsibility for non-bank financial institutions. Also non-bank financial intermediary. Abbrev. NBFI.
  
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