wiz-icon
MyQuestionIcon
MyQuestionIcon
1
You visited us 1 times! Enjoying our articles? Unlock Full Access!
Question

Q. Which of the following is/are correct about Non-Banking Financial Companies (NBFCs)?

Which of the statements given above is/are correct?


A
2 and 3 only
No worries! We‘ve got your back. Try BYJU‘S free classes today!
B
1 and 2 only
Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses
C
1 only
No worries! We‘ve got your back. Try BYJU‘S free classes today!
D
1, 2 and 3
No worries! We‘ve got your back. Try BYJU‘S free classes today!
Open in App
Solution

The correct option is B 1 and 2 only

Explanation:

  • Statement 1 is correct. NBFCs cannot accept demand deposits.
  • Statement 2 is correct. NBFC depositors are not covered under the deposit insurance facilities.
  • Statement 3 is incorrect. NBFCs can not issue cheques or draw a cheque on their own.

Difference between NBFCs and Banks:

Point of difference NBFCs Banks
Demand deposits NBFC cannot accept demand deposits. Banks can accept demand deposits.
Drawing a cheque

NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on themselves.

Banks form part of the payment and settlement system and can issue cheques drawn on themselves.

Deposit insurance facility The deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs. The deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is available to depositors of Banks.
Act of regulation

NBFCs are incorporated under the company act of 1956.

Banks are incorporated under The Banking Regulation Act 1949.

flag
Suggest Corrections
thumbs-up
0
similar_icon
Similar questions
View More
Join BYJU'S Learning Program
similar_icon
Related Videos
thumbnail
lock
Primary Functions of a Bank
ECONOMICS
Watch in App
Join BYJU'S Learning Program
CrossIcon