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Parameters | NBFC | Bank |
Registration | NBFCs are registered as per the rules and regulations laid down under the Companies Act, 1956. | Banking institutions are registered in accordance with the rules and regulations prescribed under the Banking Regulation Act of 1949. |
Services Offered | NBFCs are allowed to provide services such as loans, stock and securities dealing, and so on. However, they are not permitted to accept demand deposits. | Banks are allowed to offer both lending and demand and fixed deposit services. |
Reserve Ratio | Since NBFCs do not accept demand deposits, they are not required to maintain the cash reserve ratio. | Banks are required to maintain a CRR of 4% to meet the sudden cash demand. |
The act of paying out money for any kind of transaction is known as disbursement. From a lending perspective this usual implies the transfer of the loan amount to the borrower. It may cover paying to operate a business, dividend payments, cash outflow etc. So if disbursements are more than revenues, then cash flow of an entity is negative, and may indicate possible insolvency.
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