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In this article, we will analyze the difference between banks and NBFCs in great detail considering their meaning, types and other considerations.
Table of Contents
The term NBFC refers to Non-Banking Financial Company and for NBFC Registration the company is registered under the Companies Act, 1956 and it is governed or regulated by the Reserve Bank of India under RBI Act, 1934. Basically, the non-banking finance company is not banks but they are involved in lending and other activities like a bank, it is involved in the activities of hire purchasing, leasing, infrastructure finance, venture capital finance, housing finance, etc. In India, nonbanking finance company emerged during the middle of 1980. Kotak Mahindra Finance, Capital First, Muthoot Finance, Bajaj Capital, ICICI Ventures are some of the examples of popular Non-Banking Finance Company
Whereas Banks are the traditional financial institution, which is involved in lending the money and other financial. Banks are regulated by Banking Regulation Act 1948. Examples of Bank are Punjab National Bank, ICICI Bank, HDFC Bank etc.
NBFC Registration can be done in any of the following categories-
Whereas Banks are divided into the following categories-
Recommended Article: Non-Banking Financial Company vs Micro Finance Institution.
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