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:
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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:
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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