BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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NBFC cannot accept demand deposits
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NBFC is not a part of the payment and settlement system
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NBFC can issue cheques drawn on itself
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NBFCS are fast emerging segment of Indian financial system
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Detailed explanation-1: -NBFC depositors are not covered under the deposit insurance facilities. Statement 3 is incorrect. NBFCs can not issue cheques or draw a cheque on their own.
Detailed explanation-2: -NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on themselves; iii. the deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in the case of banks. Thus, option 2 is the correct answer.
Detailed explanation-3: -However, one cannot withdraw money from these companies, which differentiates them from a bank.
Detailed explanation-4: -Answer: [A] NBFCs does not hold a banking license. Notes: NBFC cannot accept demand deposits while NBFC cannot issue Demand Drafts like banks.
Detailed explanation-5: -Since NBFC’s do not have functions of a regular bank like accepting deposits, they have lesser regulation.