Which one of the following statements about Non-Banking Financial Comp

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Which one of the following statements about Non-Banking Financial Companies (NBFCs) is not correct ?

NBFCs cannot accept demand deposits.
NBFCs cannot give loans.
NBFCs cannot issue cheques drawn on themselves.
NBFCs cannot offer deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation.
This question was previously asked in
UPSC CDS-2 – 2022
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Non-Banking Financial Companies (NBFCs) are institutions that provide financial services, but do not have a banking license. Their primary activities include providing loans and advances, investing in shares, stocks, bonds, debentures, securities, and other marketable securities. Therefore, the statement “NBFCs cannot give loans” is incorrect. Lending is one of the principal business activities of NBFCs.
NBFCs are financial institutions whose main functions include lending and investment.
Unlike banks, NBFCs cannot accept demand deposits, cannot issue cheques drawn on themselves, and deposits with NBFCs are not covered by the Deposit Insurance and Credit Guarantee Corporation (DICGC). They are registered under the Companies Act, 2013, and regulated by the Reserve Bank of India (RBI).

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