BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following statements is incorrect about NBFCs?
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An NBFC cannot accept demand deposits.
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These institutions trade in the capital market in a variety of assets and liabilities.
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An NBFC can issue cheques drawn on itself.
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Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available for NBFC depositors.
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Explanation:
Detailed explanation-1: -NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself. Hence, statement 1 is correct.
Detailed explanation-2: -Statement 3 is incorrect: NBFC cannot accept demand deposits.
Detailed explanation-3: -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-4: -NBFC does not provide service of implementation of modernisation as per above option.
Detailed explanation-5: -Since NBFC’s do not have functions of a regular bank like accepting deposits, they have lesser regulation.
There is 1 question to complete.