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Question
Which of the following cannot be a function of an NBFC (Non Banking Financial Company)?
Which of the following cannot be a function of an NBFC (Non Banking Financial Company)?
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Solution
The correct option is D Withdrawal of money using cheques
NBFCs can be permitted by the RBI to accept deposits in accordance with the license issued to them. Accordingly they are NBFCs accepting public deposit (NBFCs-D) and NBFCs not accepting/holding public deposit (NBFCs-ND). They are also permitted to issue loans which include gold loans or housing loans. They also provide hire purchase finance. However, one cannot withdraw money from these companies, which differentiates them from a bank.
NBFCs can be permitted by the RBI to accept deposits in accordance with the license issued to them. Accordingly they are NBFCs accepting public deposit (NBFCs-D) and NBFCs not accepting/holding public deposit (NBFCs-ND). They are also permitted to issue loans which include gold loans or housing loans. They also provide hire purchase finance. However, one cannot withdraw money from these companies, which differentiates them from a bank.
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