Final answer:
Banking institutions accept deposits, while non-banking financial institutions offer loans to customers. Therefore, the correct option is C.
Step-by-step explanation:
The main difference between a banking institution and a non-banking financial institution is that banking institutions accept deposits into savings and demand deposit accounts, while non-banking financial institutions offer loans to customers. Banking institutions, such as commercial banks, credit unions, and savings banks, provide various financial services, including accepting deposits, making loans, and facilitating transactions.
On the other hand, non-banking financial institutions, such as insurance companies, mutual funds, and investment banks, primarily focus on providing financial services other than accepting deposits, such as investment management, insurance, and brokerage.