NBFC’s full form can be expanded to Non-Banking Financial Company. It is a company which is registered under Companies Act and attains a license from RBI to carry on business which is similar to banking services, but they are not governed by regulation which is laid down for commercial banks.
Commercial Banks are an establishment which is authorized by the government to accept the deposit, accept and clear withdrawals and provide other financial services such as delivering savings account, Loans Etc.
Related: NBFC Incorporation in India Under Companies Act
An NBFC company is a company that provides services to people that is similar to banking services without holding a license from RBI.
Commercial banks are government authorized financial institutions which are incorporated after registering themselves as per government regulation. They provide banking facility for the general public
An NBFC is incorporated under the Companies Act, 1956 and RBI Act.
A commercial bank is incorporated under the Banking Regulation Act, 1949 and RBI Act.
Is not a part of system
It is an essential part of the system
It is allowed up to 100%
It is allowed 74% by a Private Bank.
No checking facilities are provided to an NBFC’s moreover there is no bar on an NBFC for carrying out an activity other than financial activity.
No non–banking activity should be carried out by commercial banks. Banking Regulation Act prohibits a bank from appointing any director who is on the board of director in any other company.
It is more comfortable for the NBFC to attain registration as the regulations are less stringent as compared to commercial banks.
It is considered to be quite difficult for a bank to attain license as norms are tightly controlled by the government.
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