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Difference between NBFC ( NON-Banking Financial Company and Bank with its comparison chart.

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In this article we will discuss about Difference between NBFC ( NON-Banking Financial Company and Bank with its comparison chart.


NBFC (Non-Banking Financial Company)

NBFC are the financial companies which provides financial service to its customers without holding licence of bank. and these are registered under companies act 1956. It engaged in the business of loans and advances, acquisition of shares, stock, bonds hire-purchase, insurance business or chit business but does not include any institution whose principal business includes agriculture, industrial activity or the sale, purchase or construction of immovable property.

Banks

Banks are the financial institution which provides financial service to its customer and controlled by RBI. Banks are incorporated under Banking Regulation Act, 1949 and controlled by RBI.

The main function of banks is to accepting deposits from public and creating credits. it also provides loan facilities to household, firms, etc.Bank are those institutions which operate in money and also create credit.Bank provides safety, liquidity and profitability to its customers.

Difference between NBFC (Non-Banking Financial Company)

BASIS

NBFC

Banks

Meaning NBFC are Non-Banking Financial Company is the financial institution which provides financial service without holding account. Banks are the financial institution which provides financial service to its customer and controlled by RBI

 

Incorporated under NBFC are incorporated under companies Act 1956. Banks are incorporated under Banking Regulation Act, 1949

 

Controlled By Various measures in NBFC are controlled by RBI

 

Banks are Fully controlled by RBI
Cash Reserve Ration NBFC doesn’t have to maintain CRR. Banks have to maintain CRR to RBI

 

Statutory Liquidity Ratio Doesn’t maintain SLR It’s compulsory to maintain.

 

Credit Creation Doesn’t create credit Banks creates credit

 

Deposit Insurance Facility Not Available Available

So we have studied Difference between NBFC ( NON-Banking Financial Company and Bank with its comparison chart and if you have any query please let us know in the comments section below.

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