What is the difference between banking and financial services?

Answer 1

1. Banks: Firstly, banks are a type of financial institution. They perform a specific function of:
   a. Accepting Deposits: of individuals, non-individuals (partnerships, companies, trusts etc.). They pay an interest on your deposits.
   b. Lending: They give loans and other credit facilities to individuals & non-individuals for their business/personal requirements.
2. Financial Institution: There are several types of financial institutions. They are:
   a. Banks (Retail & Wholesale)
   b. Non-Banking Financial Companies (NBFCs)
   c. Insurance companies
   d. Pension funds
   e. Others
3. Mutual Funds
4. Hedge Funds
5. Micro-finance institutions (A type of NBFC with a clear distinction)
6. Co-operative societies
7. Financial service providers like Stock exchanges, stockbrokers, depositories & their participants.