NBFCs perform functions akin to that of banks however there are a few differences between them that ...........

Economic Affairs Others

Download Solution PDF

NBFCs perform functions akin to that of banks, however there are a few differences between them that include

An NBFC cannot accept demand deposits.
Deposit insurance facility is not available for NBFC depositors.
NBFCs need not be registered with the RBI.

Select the correct answer using the codes below.

1 and 2 only

2 and 3 only

1 and 3 only

2 only

छोटे Courses बड़े Results

Master Others

Prepare through Micro-courses

Try Now

Explanation:

Statement 1: It can’t accept deposits that are payable on demand like the savings and current accounts. But, it can accept other kinds of deposits.

This is because it is not a part of the payment and settlement system and as such cannot issue cheques to its customers.

Statement 2: Deposit insurance facility is not available for NBFC depositors unlike in the case of banks.

It means the public deposits with them are 'unsecured'. In case an NBFC defaults in repayment of deposit, the depositor can approach Company Law Board or Consumer Forum or file a civil suit to recover the deposits.

Statement 3: Under the RBI Act, 1934, the NBFCs have to get registered with the RBI.

However, to obviate dual regulation, certain category of NBFCs which are regulated by other regulators are exempted from the requirement of registration with RBI such as: venture capital fund, merchant banking companies etc.