UPSC CSE Prelims
Question 82
Consider the following statements about the Non-Banking Financial Companies (NBFCs) in India:
- NBFCs cannot accept demand deposits.
- All the NBFCs operating in India have to be registered with the RBI.
- NBFCs form part of the payment and settlement system and can issue cheque drawn on itself.
- Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation (DICGC) is not available to the depositors of deposit taking NBFCs.
Which of the statements given above is/are correct?
View correct answer and explanation
Correct answer: A
Correct Option: A
Explanation: NBFCs differ from banks: they cannot take demand deposits or issue their own payment cheques, and NBFC deposits do not receive DICGC deposit insurance.
Statement-wise Analysis:
Statement 1: Correct - NBFCs are not permitted to accept demand deposits.
Statement 2: Incorrect - Not all entities treated as NBFCs are registered with RBI; statutory exemptions and other regulators exist.
Statement 3: Incorrect - Ordinary NBFCs are not part of banks’ cheque-clearing/payment-system privileges and cannot draw cheques on themselves as banks do.
Statement 4: Correct - DICGC insurance is not available to depositors of deposit-taking NBFCs.
Option-wise Analysis:
A: Correct - This option includes the supported item(s) and excludes the unsupported ones.
B: Incorrect - Includes unsupported item(s) 2, 3 and omits supported item(s) 4.
C: Incorrect - Omits supported item(s) 1.
D: Incorrect - Includes unsupported item(s) 2, 3 and omits supported item(s) 1.