SSC Economics Sample Paper NCERT Sample Paper-4

With reference to NBFCs in India, consider the following statements:

1. They cannot buy securities issued by the Government

2. They cannot accept demand deposits like saving account. Which of the statements given above is/are correct?

A) Both 1 and 2

B) 1 only

C) 2 only

D) neither 1 nor 2

Correct Answer: C

Solution :

[c] NBFCs lend and make investments and hence their activities are akin to that of banks; however there are a few differences as given below:

(i) NBFC cannot accept demand deposits;

(ii) NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself;

(iii) deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is to depositors of NBFCs, unlike in case of banks.