How are the Non-Banking Financial Institutions different from the banks?
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Nbfc and bank both are financial companies. But the major difference is unlike banks nbfc can not issue self drawn cheques and demand draft. nbfc stands for non banking financial company as the name suggests nbfc is not a bank ,perform only lending functions to public and nbfc cannot accept deposits from public .
Another difference between the NBFC and bank fixed deposit is the insurance. Bank fixed deposits are insured, while NBFC fixed deposits are not insured.In fact, if there is a default of Rs 1 lakh and less the Deposit Insurance and Credit Guarantee Corporation of India pays the insurance amount on a bank deposit.
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