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

Consider the following statements about Non-Banking Financia - MCQ (English)

UPSC CSE PRELIMS2026General Studies

Non Banking Financial Companies

Hard

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Consider the following statements about 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 DICGC is not available to the depositors of deposit taking NBFCs.

Which of the statements given above is/are correct?

Correct Answer: A — 1 and 4

Explanation:

NBFCs do not accept demand deposits, so statement 1 is correct. Statement 2 is not accepted as universally true in the absolute form used in the question. Statement 3 is rejected because NBFCs are not banks and cannot issue cheques drawn on themselves as part of the payment and settlement system in that manner. DICGC insurance is not available to depositors of deposit-taking NBFCs, so statement 4 is correct.