Consider the following statements:
1. Non-Banking Financial Companies (NBFCs) cannot accept demand deposits, which is a key difference from banks.
2. NBFCs form part of the payment and settlement system and can issue cheques drawn on themselves.

Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Question

Consider the following statements:
1. Non-Banking Financial Companies (NBFCs) cannot accept demand deposits, which is a key difference from banks.
2. NBFCs form part of the payment and settlement system and can issue cheques drawn on themselves.

Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

ONLiNE UPSC · Accepted Answer

Statement 1 is correct: NBFCs cannot accept demand deposits, which distinguishes them from banks. Demand deposits are funds that can be withdrawn at any time without notice, and only banks are authorized to accept such deposits.

Statement 2 is not correct : NBFCs do not form part of the payment and settlement system. Unlike banks, they cannot issue cheques drawn on themselves, as they are not authorized to provide such payment services.

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Non-Banking Financial Companies (NBFCs)

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M Question 1	⏱ 0
Consider the following statements: 1. Non-Banking Financial Companies (NBFCs) cannot accept demand deposits, which is a key difference from banks. 2. NBFCs form part of the payment and settlement system and can issue cheques drawn on themselves. Which of the statements given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2