Which among the followings are correct statements with regard to NBFC in India?

(A) All NBFCs should be registered with RBI.

(B) NBFCs cannot accept demand deposits.

(C) NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself.

(D) Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs.

Choose the correct answer from the options given below:

Correct option is B

All NBFCs must register with RBI and cannot accept demand deposits or issue cheques, as they are not part of the payment system.
Information Booster:
1. NBFCs provide financial services but do not hold banking licenses.
2. Cannot accept demand deposits, unlike banks.
3. Regulated by RBI under the RBI Act, 1934.
4. Cannot issue cheques or be part of payment settlements.
5. Deposit insurance does not cover NBFC depositors.
Additional Knowledge:
· Banks vs. NBFCs: Banks can accept demand deposits and issue cheques, while NBFCs cannot.
· Types of NBFCs: Investment companies, loan companies, asset finance companies.
· Popular NBFCs in India: Bajaj Finance, HDFC Ltd., LIC Housing Finance.