Consider the following statements about the 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 Deposit Insurance and Credit Guarantee Corporation (DICGC) is not available to the depositors of deposit taking NBFCs.
Which of the statements given above is/are correct?
Correct answer: A
Explanation
NBFCs cannot accept demand deposits (1 correct) and DICGC deposit insurance does not cover NBFC depositors — only scheduled commercial, cooperative and RRB depositors are covered (4 correct). Statement 2 is wrong: certain NBFCs are exempt from RBI registration (housing finance companies regulated by NHB/RBI separately, merchant banking NBFCs regulated by SEBI, insurance NBFCs by IRDAI, etc.). Statement 3 is wrong: NBFCs are not part of the payment-and-settlement system and cannot issue cheques drawn on themselves. Hence only 1 and 4.