Which of the following statements is are correct about Non Banking Financial Companies NBFCs 1 A Non...........

Economic Affairs Non Banking Financial Companies (NBFCs)

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

1.A Non-Banking Financial Company is a company registered under the Companies Act, 1956.

2.NBFCs cannot accept the demand deposits.

3.NBFCs can also engage in chit fund businesses.

Select the correct answer using the code given below.

1 and 3 only

3 only

2 and 3 only

1, 2 and 3

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Explanation:

1, 2 and 3

The statement "A Non-Banking Financial Company is a company registered under the Companies Act, 1956" is incorrect. The Companies Act, 1956, has been replaced by the Companies Act, 2013. NBFCs are companies registered under the Companies Act, 2013, not the Companies Act, 1956.

The statement "NBFCs cannot accept demand deposits" is correct. Unlike banks, NBFCs cannot accept demand deposits. They are primarily involved in providing financial services such as loans, advances, and investments.

The statement "NBFCs can also engage in chit fund businesses" is correct. Some NBFCs are authorized to conduct chit fund businesses, subject to certain regulatory conditions.

Therefore, the correct answer is 4 - 1, 2, and 3.