Non-Banking Financial Companies (NBFCs)

Non-Banking Financial Companies (NBFCs) are fast emerging as an important segment of Indian Financial System. It is an heterogeneous group of institutions other than commercial and co-operative banks performing financial intermediation in a variety of ways,like accepting deposits, making loans and advances,leasing, hire purchases etc.

NBFCs raise funds from the public directly or indirectly and lend them to the ultimate spenders.They advances loans to the various wholesale and retail traders, small-scale industries and self employed persons.Thus they have broadened and diversified the range of products and services offered by a Financial  sector.

Difference between NBFCs and Banks:

  • An NBFCs can’t accept demand deposits.
  • An NBFCs is not a part of the payment and settlement system and as such an NBFCs cannot issue cheques drawn on itself.
  • Deposit insurance facility of deposit insurance and credit, guarantee corporation is not available for NBFC depositors unlike in case of Banks.

5 thoughts on “Non-Banking Financial Companies (NBFCs)

  1. Please explain the last point in “Differences”

    • Mehul Patel says:

      That they can’t give insurance on our deposit and they can’t give CC and guarantee on behalf of us as a guarantor.

  2. Anupam Dubey says:

    they can accept DD,but can they issue DD??

  3. where is the information abut capital market and and financial institiutions

  4. SONU KUMAR says:


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