Non-Banking Financial Companies
Def:
A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 and is engaged in the business of loans and advances, acquisition of shares, securities, leasing, hire-purchase, insurance business, and chit business.
Difference between banks & NBFCs:
NBFCs are doing functions similar to that of banks, however there are a few differences:
1) A NBFC cannot accept demand deposits,
2) It is not a part of the payment and settlement system and as such cannot issue cheques to its customers, and 3) Deposit insurance facility of DICGC is not available for NBFC depositors unlike in case of banks.
No comments:
Post a Comment