BANK | G.A | Indian Banking Industries | Definition:- Hello friends, welcome back to sarkarinotes.in. As mentioned in the last post, today we will study about banks and Non Banking Financial Companies . Without further due, let’s begin.
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INDIAN BANKING INDUSTRIES
“Bank is a financial institution which accepts deposits, provide loans and issue, pay & collect cheques and demand drafts for the bank’s customers. “
NOTE: Definition of Bank is defined in SECTION 5(b) of the BANKING REGULATION ACT, 1949.
SIMILARITIES BETWEEN BANKS AND NBFC’s
Below are the list of similarities between work of banks and work of non banking financial companies:
- ACCEPTING DEPOSITS
- FIXED INTEREST
- PROVIDING LOANS
- TERM DEPOSITS
DIFFERENCE BETWEEN BANKS AND NBFC’s
- BANKS can issue cheque/demand deposits but NBFC’s can not.
- BANKS allow demand drafts but NBFC’s do not.
EXAMPLE OF BANK:
- STATE BANK OF INDIA
- BANK OF BARODA
- PUNJAB NATIONAL BANK
- UNION BANK OF INDIA
EXAMPLE OF NBFC’s:
- MUTHOOT FINANCE
- SAHARA FINANCE
- LIC Housing Finance Ltd.
- HDFC Ltd.
DEFINITION OF BANK CONCLUSION
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 .
So, that’s it for today. Tomorrow we will discuss about TYPE OF BANKS.
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