Difference Between NBFC and Bank

While both Non-Banking Financial Companies (NBFCs) and Banks provide financial services, they differ in key areas. Banks can accept demand deposits, issue checks, and are part of the national payment system, whereas NBFCs cannot. NBFCs provide loans, credit facilities, and investments but focus more on asset financing and catering to underserved markets. Banks are strictly regulated by the RBI and must meet CRR and SLR requirements, while NBFCs follow lighter regulations. Ultimately, banks offer a wider range of services, while NBFCs specialize in lending and investments, often targeting niche or high-risk sectors.