Difference between Bank and NBFC

By Sudheer Kumar K|Updated : February 27th, 2021

In this article, we will be knowing about the major difference between Banks and NBFCs (Non-Banking Financial Companies) in brief. Both banks and non-banking financial companies (NBFC) are financial intermediaries, which offer almost similar services to the customers. However, there is a huge difference between Banks and NBFCs as mentioned in the table below.

As banks alone cannot cater to the financial needs of all the sections of the society, NBFC came into being to complement banks in providing finance to people. 





A bank is registered under the Banking Regulation Act, 1949.

An NBFC is incorporated under the Indian Companies Act, 1956


Banks issue self-drawn cheques, demand drafts and fund transfer etc.

NBFCs cannot issue.


Banks accept demand deposits.

NBFCs are not allowed to accept such deposits which are repayable on demand.


Banks are required to maintain reserve ratios like CRR or SLR.

NBFCs are not required to maintain reserve ratios.



Banks are an integral part of the payment and settlement cycle.


Non-banking financial companies are not involved in such transactions.


The depositors of the banks are provided with deposit insurance facility by the Deposit Insurance and Credit Guarantee Corporation (DICGC).


No such facility is available in the case of NBFC.

Hence both Banks and Non-bank financial companies facilitate the credit needs of the people and businesses.

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