| With reference to the Non-banking Financial Companies (NBFC's) in India, consider the following statements: |
| 1. They cannot engage in the acquisition of securities issued by the government. |
| 2. They cannot accept demand deposits like Savings Account. Which of the statements given above is/are correct? |
A) 1 only
B) 2 only
C) Both 1 and 2
D) Neither I nor 2
Correct Answer: B
Solution :
[b] A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property. NBFC cannot accept demand deposits; NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself;
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