SSC Economics Sample Paper NCERT Sample Paper-4

  • question_answer
    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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