With reference to NBFCs in India, consider the following statements: |
1. They cannot buy securities issued by the Government |
2. They cannot accept demand deposits like saving account. Which of the statements given above is/are correct? |
A) Both 1 and 2
B) 1 only
C) 2 only
D) neither 1 nor 2
Correct Answer: C
Solution :
[c] NBFCs lend and make investments and hence their activities are akin to that of banks; however there are a few differences as given below:(i) NBFC cannot accept demand deposits; |
(ii) NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself; |
(iii) deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is to depositors of NBFCs, unlike in case of banks. |
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