Explanation
- A
1 and 4
Statement 1 is correct because NBFCs can accept only term deposits, not demand deposits like savings or current accounts payable on demand. Statement 4 is also correct because the deposit insurance facility of DICGC is not available to depositors of NBFCs.
- B
1, 2 and 3
Statement 1 is correct, but statement 3 is incorrect because NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on themselves. Therefore, this option is incorrect.
- C
4 only
Statement 4 is correct, but statement 1 is also correct. Omitting statement 1 makes this option incomplete.
- D
2, 3 and 4
Statement 4 is correct, but statements 2 and 3 contain errors. Not all NBFCs are required to be registered with the RBI (certain categories like core investment companies below specific asset sizes, housing finance companies registered with NHB, or nidhi companies regulated by MCA are exempt from direct RBI registration in certain contexts, and statement 3 is factually wrong regarding cheque issuance). Therefore, this option is incorrect. Summary. Official key is (a) because NBFCs are legally barred from accepting demand deposits and cannot issue cheques, and DICGC deposit insurance does not extend to NBFC depositors, making statements 1 and 4 correct while 2 and 3 are incorrect.
Summary. Official key is (a) because NBFCs are legally barred from accepting demand deposits and cannot issue cheques, and DICGC deposit insurance does not extend to NBFC depositors, making statements 1 and 4 correct while 2 and 3 are incorrect.
Same topic · past papers
UPSC has asked this before
These previous-year questions sit on the same topic. Open one to practise the earlier ask.