Which of the following is not classified as a Non Banking Financial Institution (NBFI) in India?

Introduction / Context:

This question tests understanding of the financial system in India, specifically the distinction between non banking financial institutions and commercial banks. Non banking financial institutions play an important role in providing specialised finance and development support, while commercial banks handle regular deposit and lending operations. Correctly identifying which organisation is not an NBFI shows clarity about institutional roles in the financial sector.

Given Data / Assumptions:

Concept / Approach:

EXIM Bank, SIDBI, and NABARD are all examples of specialised financial institutions often grouped under the category of All India Financial Institutions or development financial institutions, and they function as non banking financial institutions. BOI stands for Bank of India, which is a government owned commercial bank that accepts public deposits and provides full banking services. Therefore, among the options, BOI is the one that is not classified as an NBFI, since it is a regular bank rather than a non banking financial institution.

Step-by-Step Solution:

Verification / Alternative check:

To verify, recall that economic survey documents often list EXIM Bank, NABARD, and SIDBI together as All India Financial Institutions supervised by RBI, while Bank of India appears in the list of public sector commercial banks. Also, non banking financial institutions do not usually accept demand deposits like savings accounts in the same way commercial banks do. Bank of India operates as a typical banking institution, which confirms that it is not an NBFI.

Why Other Options Are Wrong:

EXIM: Export Import Bank of India is a specialised development financial institution that supports trade finance and is classified as a non banking financial institution.

SIDBI: Small Industries Development Bank of India is a development financial institution for small industries and is considered an NBFI.

NABARD: National Bank for Agriculture and Rural Development is an apex development financial institution for rural credit, not a regular commercial bank.

Common Pitfalls:

Students may be confused by the word bank in NABARD, EXIM Bank, and SIDBI and assume that all such institutions are commercial banks. Another pitfall is not distinguishing between development financial institutions and deposit taking commercial banks. The key is to note that Bank of India is a typical nationalised commercial bank, while EXIM, SIDBI, and NABARD are specialised non banking or development financial institutions. Remembering this difference helps in quickly identifying BOI as the option that is not an NBFI.

Final Answer:

The correct answer is BOI.