ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Yes
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No
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Either A or B
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None of the above
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Detailed explanation-1: -Investment banks don’t take deposits. Instead, one of their main activities is raising money by selling ‘securities’ (such as shares or bonds) to investors, including high net-worth individuals and organisations such as pension funds.
Detailed explanation-2: -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. The present ceiling is 12.5 per cent per annum.
Detailed explanation-3: -Nonbanking financial institution. Anonbank financial institution (NBFI) is a financial institution that does not have a full banking license and cannot accept deposits from the public.
Detailed explanation-4: -A commercial bank is a financial institution that accepts deposits, offers checking and savings account services, and makes loans.
Detailed explanation-5: -NBFCs are unable to accept demand deposits. NBFCs are not part of the payment and settlement system, so they are unable to issue checks drawn on themselves. Unlike banks, NBFC depositors do not have access to the Deposit Insurance and Credit Guarantee Corporation’s deposit insurance facility.