Bank Interview Quesiton : What is difference b/w banks & NBFCs

Ques)  NBFCs are doing functions similar to banks. What is difference between banks & NBFCs ?
Ans :  NBFCs lend and make investments and hence their activities are akin to that of banks; however there are a few differences as given below:NBFC cannot accept demand deposits;


NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself; deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks.

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