Consider the following regarding Non-Banking Financial Company (NBFC):
1) NBFC can accept demand deposits
2) NBFC can issue cheques drawn on itself
3) NBFC doesn’t require any license to carry out its functions.
Select the correct statement/s.
Explanation:
All the statements are incorrect.
NBFCs lend and make investments and hence their activities are akin to that of banks; however there are a few differences as given below:
1) NBFC cannot accept demand deposits;
2) NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself;
3) deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks.