Diffrence betn Banks & NBFC

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 August 2010 Can u explain please what is the basic difference betn banks, financial institutions and NBFC's....?

and acts governing them.

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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07 August 2010 Banks under : Banking companies act

NBFC : Companies Act

Bank: accepts deposits from public

NBFC : can't accept deposits from public

There are many more

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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07 August 2010 NBFCs are doing functions akin to that of banks; however there are a few differences:

(i) an NBFC cannot accept demand deposits; (ii) an NBFC is not a part of the payment and settlement system and as such an NBFC cannot issue cheques drawn on itself; and (iii) deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available for NBFC depositors unlike in case of banks.

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