Banking & Non Banking Financial Institution .pdf

Comparison between banking and non banking institution

1. BANKING &
NON-BANKING
FINANCIAL
INSTITUTIONS

2. Name : PratikshaRajendraYeole
Roll No. : 2224350
Div. : A
Course : 221 MKT (SE) Marketing
Financial Services-1
Class :MBA First Year
CCE : 3

3. BANKING FINANCIAL INSTITUTIONS
•Definition: Banking institutions are financial institutions that provide a
range of financial services, including accepting deposits, granting loans,
and facilitating transactions. They are licensed and regulated by banking
authorities.
•Examples: Commercial banks, investment banks, and central banks are
common examples of banking institutions.
•Function: Banking institutions play a crucial role in the economy by
channeling funds from savers to borrowers. They provide a safe place for
individuals and businesses to deposit their money, offer loans for various
purposes, and facilitate payments and transactions.
•Regulation: Banking institutions are subject to strict regulatory
frameworks enforced by government authorities. They must adhere to
regulations regarding capital adequacy, liquidity, risk management,
consumer protection, and anti-money laundering measures.

4. NON-BANKING FINACIAL INSTITUTIONS
•Definition: Non-banking financial institutions, also known as NBFI, are
financial intermediaries that provide financial services similar to banking
institutions but are not licensed as banks. They operate under different
regulatory frameworks.
•Examples: Examples of NBFI include insurance companies, pension
funds, mutual funds, leasing companies, and microfinance institutions.
•Function: NBFI complement the services offered by banking institutions
by catering to specialized financial needs. For example, insurance
companies offer coverage for various risks, while pension funds provide
retirement planning and investment options. Mutual funds pool funds
from multiple investors and invest in a diversified portfolio.
•Regulation: While NBFI are not classified as banks, they are still regulated
by financial regulatory authorities. However, the regulatory requirements
for NBFI may vary depending on the specific type of institution and the
jurisdiction in which they operate.

5. CONTRAST BETWEEN…
BANKING FINANCIAL INSTITUTIONS NON-BANKING FINANCIAL INSTITUTIONS
1.Deposit-taking: Banks accept deposits from individuals,
businesses, and other entities, which form a significant portion of
their liabilities. These deposits can be withdrawn on demand or
have specified terms.
2.Credit creation: Banks have the ability to create credit by lending
out a significant portion of the deposits they receive. They play a
crucial role in the economy by providing loans and financing for
various purposes.
3.Central bank regulation: Banks are typically regulated and
supervised by central banks or regulatory authorities in their
respective countries. They must comply with prudential
regulations, capital adequacy requirements, and other guidelines
to maintain stability and protect depositors.
4.Payment services: Banks facilitate various payment services such
as issuing debit and credit cards, providing online banking
facilities, electronic fund transfers, and clearing checks.
5.Interest-based profit: Banks earn profits through the interest
spread, which is the difference between the interest rates charged
on loans and the interest paid on deposits. They also generate
revenue through fees and commissions for the services they offer.
1.Non-deposit-taking: Unlike banks, NBFI's primary focus is not on
accepting deposits from the public. Instead, they rely on other
sources of funding such as borrowing from banks, issuing bonds,
equity investments, or securitization.
2.Specialized services: NBFI's specialize in specific financial
services such as insurance, mutual funds, leasing, factoring,
venture capital, hedge funds, pension funds, and other
investment-related activities.
3.Regulation: While NBFI's are subject to regulation, they are
typically governed by different regulatory bodies than banks. The
regulations governing NBFI's focus on ensuring fair practices,
investor protection, and risk management.
4.Risk-taking: NBFI's often undertake higher levels of risk
compared to traditional banks. They may engage in activities such
as investing in securities, derivatives, or engaging in speculative
trading strategies.
5.Fee-based income: Instead of relying on the interest spread,
NBFI's generate income primarily through fees, commissions, and
investment returns. For example, insurance companies collect
premiums, while mutual funds charge management fees.

6. BANKING FINANCIAL INSTITUTION

7. FEATURES OF STATE BANK OF INDIA
•Banking Services: SBI provides a comprehensive range of banking
services, including savings accounts, current accounts, fixed deposits,
recurring deposits, and demataccounts. Customers can easily open and
manage these accounts online or at SBI branches.
•Internet and Mobile Banking: SBI offers convenient internet banking
and mobile banking services, allowing customers to access their accounts,
make transactions, pay bills, transfer funds, and view account statements
anytime, anywhere.
•Loans and Credit: SBI provides various loan options, such as home loans,
personal loans, car loans, education loans, and business loans. They also
offer credit cards with different features and benefits.
•Investment and Wealth Management: SBI offers investment products
and services, including mutual funds, insurance plans, retirement plans,
and wealth management solutions. Customers can get expert advice and
guidance for their investment needs.
•International Banking: SBI facilitates international banking services, such
as foreign currency accounts, foreign exchange services, international
money transfers, and trade finance facilities.

8. FEATURES OF STATE BANK OF INDIA
•Government Schemes: SBI plays a significant role in implementing various
government-backed schemes, such as PradhanMantriJan DhanYojana(financial
inclusion program), PradhanMantriMudraYojana(small business loans), and various
rural development schemes.
•Online and Mobile Payments: SBI offers online payment solutions, including SBI Pay,
SBI Net Banking, and SBI UPI (Unified Payments Interface). Customers can easily make
payments, transfer funds, and conduct online transactions using these platforms.
•Insurance and Pension Plans: SBI provides life insurance, health insurance, and
pension plans to help individuals and families protect themselves financially. They offer
a range of insurance products in collaboration with leading insurance companies.
•NRI Services: SBI has dedicated services for Non-Resident Indians (NRIs), including
NRI accounts, remittances, investment options, and assistance with financial planning
for NRIs.
•Customer Support: SBI offers customer support services through various channels,
including phone banking, email support, and branch assistance. They have a
widespread branch network and ATMs across India to provide convenient access to
their services.

9. NON-BANKING FINANCIAL INSTITUTION

10. FEATURES OF BAJAJ FINSERV
•Diversified Financial Services: Bajaj Finservoffers a wide range of financial
services, including lending, asset management, insurance, wealth
management, and consumer finance. This diversification allows the company
to cater to various financial needs of individuals and businesses.
•Lending Solutions: Bajaj Finservprovides lending solutions to individuals
and businesses. It offers loans for various purposes such as personal loans,
home loans, business loans, loan against property, and more. The company
follows a streamlined process with quick approvals and minimal
documentation.
•EMI Finance: Bajaj Finservis well-known for its EMI (Equated Monthly
Installment) finance options. It enables customers to convert their purchases
into easy EMIs, making high-value purchases more affordable and convenient.
This facility is available across a wide range of products and services,
including consumer electronics, appliances, healthcare, travel, and lifestyle.
•Insurance Services: Bajaj Finservoffers insurance products across different
categories. It provides general insurance, health insurance, life insurance, and
motor insurance, among others. These insurance offerings provide financial
protection and coverage against various risks.

11. FEATURES OF BAJAJ FINSERV
•Investment and Wealth Management: Bajaj Finservalso offers investment and wealth
management services. It provides investment options such as mutual funds, fixed deposits,
bonds, and other investment avenues. The company's wealth management services assist
individuals in managing and growing their wealth effectively.
•Digital Services: Bajaj Finservhas embraced digital technology to enhance customer
experience and convenience. It provides online platforms and mobile applications for loan
applications, account management, and access to various financial services. These digital
services make transactions and interactions with the company more efficient and accessible.
•Network and Reach: Bajaj Finservhas a vast network of branches and service centers
across India, making its services easily accessible to customers. It has expanded its presence
in both urban and rural areas, ensuring financial inclusion and serving a diverse customer
base.
•Customer Support: Bajaj Finservprioritizes customer service and provides efficient support
to its customers. It offers dedicated customer helplines, online assistance, and service
centers to address queries, concerns, and provide timely assistance.
•Strong Brand Reputation: Bajaj Finservis a trusted and well-established brand in the
financial services sector. It is part of the Bajaj Group, a renowned conglomerate in India,
known for its strong track record and customer-centric approach.

12. CONCLUSION
Both Bank and Non-bank financial institution are important
part of our financial environment. In Bangladesh now
different commercial banks and the non-banking financial
organizations are operating there business. And every
organization now involved attracting the retail customers
that means the middle income group people of the
country. Actually State Bank of India and Bajaj Finservhave
great contributioninoureconomy.

13. THANK YOU