A non-banking financial company cannot
[amp_mcq option1=”give loans” option2=”make investments” option3=”borrow from bank” option4=”seek demand deposits from public and cannot issue cheques” correct=”option4″]
This question was previously asked in
UPSC CAPF – 2022
– Unlike banks, NBFCs cannot accept demand deposits (deposits withdrawable by cheque, draft, order or otherwise). They can accept time deposits (like fixed deposits).
– NBFCs are not part of the payment and settlement system, and they cannot issue cheques drawn on themselves.
– NBFCs are permitted to give loans, make investments in securities, and borrow funds, including from banks.
– NBFCs are regulated by the Reserve Bank of India (RBI), but the regulatory framework differs from that for banks.
– The primary distinction between banks and NBFCs lies in their ability to accept demand deposits and participate in the payment and settlement system.