BANKING AFFAIRS

Detailed explanation-1: -An RNBC can accept deposits for a minimum period of 12 months and maximum period of 84 months from the date of receipt of such deposit. They cannot accept deposits repayable on demand.

Detailed explanation-2: -No deposits which are repayable on demand shall be accepted or renewed. No deposits which are repayable on notice within a period of 6 months or more than 36 months shall be accepted or renewed.

Detailed explanation-3: -Period of Public Deposit: No non-banking financial company shall accept or renew any public deposit, unless such deposit is repayable after a period of twelve months but not later than sixty months from the date of acceptance or renewal thereof.

Detailed explanation-4: -NBFCs are unable to accept demand deposits. NBFCs are not part of the payment and settlement system, so they are unable to issue checks drawn on themselves. Unlike banks, NBFC depositors do not have access to the Deposit Insurance and Credit Guarantee Corporation’s deposit insurance facility.

Detailed explanation-5: -NBFCs are often called shadow banks as they function a lot like banks but with fewer regulatory controls. Barring a few, they cannot accept deposits from people and so raise money from bonds or borrow from banks.