Nbfc vs banks

Manish Jain (Chartered Accountant) (119 Points)

30 May 2016  

I am well aware of the differences between NBFCs and Banks.

However, there is one question that really has made me scratch my head: Why NBFCs when there are banks?

I mean what is the purpose of NBFCs in an economy? Why doesn't RBI provides licenses to more banks rather than providing licenses to NBFCs?