{"id":4329,"date":"2026-05-25T12:08:45","date_gmt":"2026-05-25T12:08:45","guid":{"rendered":"https:\/\/jumpp.finance\/blog\/?p=4329"},"modified":"2026-05-25T12:08:46","modified_gmt":"2026-05-25T12:08:46","slug":"difference-between-bank-and-nbfc","status":"publish","type":"post","link":"https:\/\/jumpp.finance\/blog\/financial-management\/personal-finance\/difference-between-bank-and-nbfc\/","title":{"rendered":"Difference Between a Bank and an NBFC – Features, Risks, and Benefits"},"content":{"rendered":"
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Today, many Indians use UPI daily, keep savings in banks, take EMIs through NBFCs, and still do not fully understand how differently these institutions work. Someone may trust a bank for salary and savings, but choose an NBFC for a quick bike loan or instant EMI because the process feels easier. But what is the difference between a bank and an NBFC?<\/p>\n\n\n\n

Let\u2019s see!<\/p>\n\n\n\n

<\/span>What is a Bank?<\/span><\/h2>\n\n\n\n

A bank is a financial institution licensed by the Reserve Bank of India (RBI) that accepts deposits, provides loans, and offers banking services like savings accounts, UPI, cheque books, ATMs, and online transfers. Banks are a core part of India\u2019s payment and financial system.<\/p>\n\n\n\n

Check out the top 10 private banks in India<\/a>!<\/em><\/p>\n\n\n\n

<\/span>What is NBFC in Banking?<\/span><\/h2>\n\n\n\n

NBFC full form is Non-Banking Financial Company<\/strong>.\u00a0<\/p>\n\n\n\n

An NBFC is a financial company that offers loans, EMI financing, asset financing, and investment-related services, but it does not operate as a full-fledged bank. NBFCs cannot provide regular savings\/current accounts like banks.<\/p>\n\n\n\n

Can NBFCs Give Loans?<\/h3>\n\n\n\n

Yes, NBFCs can legally give loans in India. In fact, lending is one of the main services offered by NBFCs, including personal loans, gold loans, vehicle loans, business loans, and EMI financing.<\/p>\n\n\n\n

Looking for a quick personal loan with a simple digital process? Explore loans on the personal loan app<\/a>, jUMPP Finance, for faster approvals, flexible options, and smart money management features.<\/em><\/p>\n\n\n\n

<\/span>What is the Difference Between a Bank and an NBFC?<\/span><\/h2>\n\n\n\n

A bank is a licensed financial institution that can accept deposits, offer savings\/current accounts, issue cheque books, and participate in the payment system. An NBFC (Non-Banking Financial Company) also provides loans and financial services, but it does not have a full banking licence like a bank. <\/p>\n\n\n\n

Here is the simple difference between an NBFC and a bank –<\/p>\n\n\n\n

Basis<\/strong><\/td>Bank<\/strong><\/td>NBFC<\/strong><\/td><\/tr>
Can accept savings\/current deposits<\/td>Yes<\/td>No demand deposits<\/td><\/tr>
Cheque book facility<\/td>Yes<\/td>No<\/td><\/tr>
Part of the payment system<\/td>Yes<\/td>No<\/td><\/tr>
Regulation<\/td>RBI under the Banking Regulation Act<\/td>RBI under the RBI Act<\/td><\/tr>
Loan approval speed<\/td>Usually slower due to stricter checks<\/td>Often faster and more flexible<\/td><\/tr>
Interest rates on loans<\/td>Generally lower<\/td>Can be higher<\/td><\/tr>
Credit accessibility<\/td>Strict eligibility<\/td>Easier for low or limited-credit profiles<\/td><\/tr>
Deposit insurance<\/td>Protected by DICGC insurance<\/td>Usually not available<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

<\/p>\n\n\n\n

For example, when someone opens a salary account, uses UPI, withdraws cash from an ATM, or writes cheques, they need a bank. But when someone wants a quick personal loan, bike loan, gold loan, or EMI financing with flexible approval, many people choose NBFCs because the process is often faster.<\/p>\n\n\n\n

Know how to write a cancelled cheque!<\/a><\/em><\/p>\n\n\n\n

\"Open<\/a><\/figure>\n\n\n\n

<\/p>\n\n\n\n

<\/span>What are the Advantages of banks?<\/span><\/h2>\n\n\n\n

Banks are usually considered better for savings, financial security, and complete banking services. They are ideal for people looking for long-term financial stability and lower-risk banking options.<\/p>\n\n\n\n