Consider the following statements about Non-Banking Financial Companies (NBFCs) in India: 1. NBFCs c

Question

Consider the following statements about Non-Banking Financial Companies (NBFCs) in India: 1. NBFCs cannot accept demand deposits. 2. All NBFCs operating in India have to be registered with RBI. 3. NBFCs form part of the payment and settlement system and can issue cheques drawn on themselves. 4. DICGC deposit insurance is not available to depositors of deposit-taking NBFCs.

Accepted Answer

Statement 1 is correct — NBFCs cannot accept demand deposits. Statement 2 is incorrect — financial companies regulated by other statutory bodies (SEBI, IRDAI, MCA, state governments) are exempt from RBI registration. Statement 3 is incorrect — NBFCs do not form part of the national payment and settlement system and cannot issue cheques drawn on themselves. Statement 4 is correct — DICGC cover (up to ₹5 lakh) is exclusively for bank depositors, not NBFC depositors.