Q. Which of the following was the difference between a bank and a Non-Banking Financial Institution (NBFI)?
Answer: a bank indulges in a number of activities relating to finance with a range of customers, while an NBFI is mainly concerned with the term loan needs of large enterprises
Notes: Banks and non-banking financial companies (NBFC) both are key financial intermediaries that offer almost similar services to the customers. The major difference between NBFC and bank is that unlike banks, an NBFC cannot issue self-drawn cheques and demand drafts. Also a bank indulges in a number of activities relating to finance with a range of customers, while an NBFI is mainly concerned with the term loan needs of large enterprises.