BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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They are allowed to accept/renew public deposits for a minimum period of 12 months and maximum period of 60 months
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They cannot accept deposits repayable on demand
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They should have minimum investment grade credit rating
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The repayment of deposits by NBFCs is guaranteed by RBI
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Detailed explanation-1: -Statement 3 is incorrect: NBFC cannot accept demand deposits.
Detailed explanation-2: -The repayment of deposits by NBFCs is not guaranteed by RBI. Certain mandatory disclosures are to be made about the company in the Application Form issued by the company soliciting deposits.
Detailed explanation-3: -NBFCs cannot accept deposits for a period less than 12-months and more than 60 months and the maximum interest rate that an NBFC can pay to a depositor should not exceed 12.5%.
Detailed explanation-4: -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.