What is the difference between Banks and Non-Banking Financial Companies (NBFCs) ?
CS Executive · Economic, Business and Commercial Laws · PYQS · June 2024
What is the difference between Banks and Non-Banking Financial Companies (NBFCs) ?
Answer & Explanation:
Non-Banking Financial Companies (NBFCs) lend and make investments and hence their activities are akin to that of Banks, however there are a few differences as given below: NBFC cannot accept demand deposits, NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself; deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks.
Topics: Financial Institutions
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