Features of Banking And Non-Banking Financial Institutions - SS1 Economics Lesson Note

Banking and non-banking financial institutions (NBFI) are two types of financial intermediaries that provide different services and have distinct features.

Banking Institutions:

Features:

• Accept deposits from customers and pay interest on those deposits

• Offer various types of loans, such as personal loans, mortgages, and business loans

• Provide payment services, such as checking accounts and credit cards

• Regulated by the central bank of the country

• Federally insured by the government up to a certain amount

 

Non-Banking Financial Institutions (NBFI):

Features:

• Do not accept deposits from customers

• Provide various financial services such as insurance, investment management, and leasing

• Not regulated by the central bank but by other regulatory bodies such as the Securities and Exchange Commission (SEC)

• Do not offer federally insured deposits