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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NBFCs cannot issue cheques drawn on itself
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Deposit insurance facility of DICGC is not available to depositors of NBFCs
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All are true
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Detailed explanation-1: -NBFCs cannot accept demand deposits. Statement 2 is correct. NBFC depositors are not covered under the deposit insurance facilities.
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: -Investment banks, mortgage lenders, money market funds, insurance companies, hedge funds, private equity funds, and P2P lenders are all examples of NBFCs.
Detailed explanation-4: -SALIENT FEATURES OF NBFCs The NBFCs are allowed to accept/renew public deposits for a minimum period of 12 months and maximum period of 60 months. They cannot accept deposits repayable on demand. NBFCs cannot offer interest rates higher than the ceiling rate prescribed by RBI from time to time.