BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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NBFCs can accept deposits from the public
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NBFCs cannot offer deposit schemes to the public
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Deposits of NBFCs are insured with DICGC
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NBFCs can accept deposits from the public if they are registered and permitted by RBI
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Detailed explanation-1: -All NBFCs are not entitled to accept public deposits. Only those NBFCs to which the Bank had given a specific authorisation and have an investment grade rating are allowed to accept/ hold public deposits to a limit of 1.5 times of its Net Owned Funds.
Detailed explanation-2: -NBFCs cannot accept demand deposits. Statement 2 is correct.
Detailed explanation-3: -Which entities can legally accept deposits from public? Banks, including co-operative banks, can accept deposits. Non-bank finance companies, which have been issued Certificate of Registration by RBI with a specific licence to accept deposits, are entitled to accept public deposit.
Detailed explanation-4: -Core Investment Companies – (assets are less than 100 crore or public funds not taken) Merchant Banking Companies. Companies that are engaged in the business of stock-broking. Housing Finance Companies.
Detailed explanation-5: -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.