Consider the following statements regarding Non-Banking Financial Companies. NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself. NBFCs cannot accept demand deposits. Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs.Which of the above statements is/are correct?a)Only 1b)1 and 3 onlyc)2 and 3 onlyd)1, 2 and 3e)1 and 2 onlyCorrect answer is option 'D'. Can you explain this answer?

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Consider the following statements regarding Non-Banking Financial Companies.

NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself.
NBFCs cannot accept demand deposits.
Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs.

Which of the above statements is/are correct?

a)
Only 1
b)
1 and 3 only
c)
2 and 3 only
d)
1, 2 and 3
e)
1 and 2 only

Correct answer is option 'D'. Can you explain this answer?

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Consider the following statements regarding Non-Banking Financial Comp...

NBFCs lend and make investments and hence their activities are akin to that of banks; however, there are a few differences as given below:
NBFC cannot accept demand deposits; (The NBFCs are allowed to accept/renew public deposits for a minimum period of 12 months and a maximum period of 60 months. They cannot accept deposits repayable on demand.) Hence, statement 2 is correct.
NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself. Hence, statement 1 is correct.
The deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks. Hence, statement 3 is correct.

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Directions: Read the passage carefully and select the best answer to each question out of the given five alternatives.In a bid to ensure timely support to depositors of stressed banks, the government may bring amendment to DICGC Act in the monsoon session with the objective to provide account holders easy and time-bound access to funds to the extent of the deposit insurance cover. Last year, the government raised insurance cover on deposit five-folds to Rs 5 lakh with a view to provide support to depositors of ailing lenders like Punjab and Maharashtra Co-operative (PMC) Bank. Following the collapse of PMC Bank, Yes Bank and Lakshmi Vilas Bank NSE 4.79 % too came under stress leading to restructuring by the regulator and the government.The amendment to the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, 1961 is the budget announcement made by the Finance Minister and the Bill is almost ready, sources said. It is expected that the Bill will be tabled in the upcoming monsoon session after being vetted by the Union Cabinet, sources added. Once the Bill becomes the law, it will provide immediate relief to thousands of depositors who had their money parked in stressed lenders such as PMC Bank and other small cooperative banks.As per the current provisions, the deposit insurance of up to Rs 5 lakh comes into play when the licence of a bank is cancelled and liquidation process starts. DICGC, a wholly-owned subsidiary of the Reserve Bank of India, provides insurance cover on bank deposits. Finance Minister Nirmala Sitharaman in the Budget speech in February said the government had approved an increase in the Deposit Insurance cover from Rs 1 lakh to Rs 5 lakh for bank customers last year. It could not be presented in the Budget session due to curtailment of the last session following the spread of the second wave of COVID-19 pandemic.It is to be noted that the enhanced deposit insurance cover of Rs 5 lakh is effective from February 4, 2020. The increase was done after a gap of 27 years as it was static since 1993. The cover is provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly-owned subsidiary of the RBI. With increased insurance cover, the banks are paying a higher premium of 12 paise against 10 paise per Rs 100 deposited without any additional burden on account holders. The deposit insurance scheme covers all banks operating in India, including private sector, cooperative, and even branches of foreign banks. There are some exemptions such as deposits of foreign governments, deposits of central and state governments, and inter-bank deposits.It can be recalled that way back in 2009, the Raghuram Rajan committee on financial sector reforms had recommended strengthening the capacity of the DICGC, a more explicit system of prompt, corrective action, and making deposit insurance premia more risk-based.Q. Consider the following statements and answer the question.A. the government raised insurance cover on deposit five-folds to Rs. 5 lakh.B. The amendment is brought by the suggestion of RBI.C. The amendment is made to ease the burden of the depositors.

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Directions: Read the passage carefully and select the best answer to each question out of the given five alternatives.In a bid to ensure timely support to depositors of stressed banks, the government may bring amendment to DICGC Act in the monsoon session with the objective to provide account holders easy and time-bound access to funds to the extent of the deposit insurance cover. Last year, the government raised insurance cover on deposit five-folds to Rs 5 lakh with a view to provide support to depositors of ailing lenders like Punjab and Maharashtra Co-operative (PMC) Bank. Following the collapse of PMC Bank, Yes Bank and Lakshmi Vilas Bank NSE 4.79 % too came under stress leading to restructuring by the regulator and the government.The amendment to the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, 1961 is the budget announcement made by the Finance Minister and the Bill is almost ready, sources said. It is expected that the Bill will be tabled in the upcoming monsoon session after being vetted by the Union Cabinet, sources added. Once the Bill becomes the law, it will provide immediate relief to thousands of depositors who had their money parked in stressed lenders such as PMC Bank and other small cooperative banks.As per the current provisions, the deposit insurance of up to Rs 5 lakh comes into play when the licence of a bank is cancelled and liquidation process starts. DICGC, a wholly-owned subsidiary of the Reserve Bank of India, provides insurance cover on bank deposits. Finance Minister Nirmala Sitharaman in the Budget speech in February said the government had approved an increase in the Deposit Insurance cover from Rs 1 lakh to Rs 5 lakh for bank customers last year. It could not be presented in the Budget session due to curtailment of the last session following the spread of the second wave of COVID-19 pandemic.It is to be noted that the enhanced deposit insurance cover of Rs 5 lakh is effective from February 4, 2020. The increase was done after a gap of 27 years as it was static since 1993. The cover is provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly-owned subsidiary of the RBI. With increased insurance cover, the banks are paying a higher premium of 12 paise against 10 paise per Rs 100 deposited without any additional burden on account holders. The deposit insurance scheme covers all banks operating in India, including private sector, cooperative, and even branches of foreign banks. There are some exemptions such as deposits of foreign governments, deposits of central and state governments, and inter-bank deposits.It can be recalled that way back in 2009, the Raghuram Rajan committee on financial sector reforms had recommended strengthening the capacity of the DICGC, a more explicit system of prompt, corrective action, and making deposit insurance premia more risk-based.Q. Consider the following statements and choose the correct option.A. the enhanced deposit insurance cover of Rs. 5 lakh.B. The increase is never seen in Indian history.C. DICGC is a subsidiary of the Indian govt.

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Directions: Read the passage carefully and select the best answer to each question out of the given five alternatives.In a bid to ensure timely support to depositors of stressed banks, the government may bring amendment to DICGC Act in the monsoon session with the objective to provide account holders easy and time-bound access to funds to the extent of the deposit insurance cover. Last year, the government raised insurance cover on deposit five-folds to Rs 5 lakh with a view to provide support to depositors of ailing lenders like Punjab and Maharashtra Co-operative (PMC) Bank. Following the collapse of PMC Bank, Yes Bank and Lakshmi Vilas Bank NSE 4.79 % too came under stress leading to restructuring by the regulator and the government.The amendment to the Deposit Insurance and Credit Guarantee Corporation (DICGC) Act, 1961 is the budget announcement made by the Finance Minister and the Bill is almost ready, sources said. It is expected that the Bill will be tabled in the upcoming monsoon session after being vetted by the Union Cabinet, sources added. Once the Bill becomes the law, it will provide immediate relief to thousands of depositors who had their money parked in stressed lenders such as PMC Bank and other small cooperative banks.As per the current provisions, the deposit insurance of up to Rs 5 lakh comes into play when the licence of a bank is cancelled and liquidation process starts. DICGC, a wholly-owned subsidiary of the Reserve Bank of India, provides insurance cover on bank deposits. Finance Minister Nirmala Sitharaman in the Budget speech in February said the government had approved an increase in the Deposit Insurance cover from Rs 1 lakh to Rs 5 lakh for bank customers last year. It could not be presented in the Budget session due to curtailment of the last session following the spread of the second wave of COVID-19 pandemic.It is to be noted that the enhanced deposit insurance cover of Rs 5 lakh is effective from February 4, 2020. The increase was done after a gap of 27 years as it was static since 1993. The cover is provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly-owned subsidiary of the RBI. With increased insurance cover, the banks are paying a higher premium of 12 paise against 10 paise per Rs 100 deposited without any additional burden on account holders. The deposit insurance scheme covers all banks operating in India, including private sector, cooperative, and even branches of foreign banks. There are some exemptions such as deposits of foreign governments, deposits of central and state governments, and inter-bank deposits.It can be recalled that way back in 2009, the Raghuram Rajan committee on financial sector reforms had recommended strengthening the capacity of the DICGC, a more explicit system of prompt, corrective action, and making deposit insurance premia more risk-based.Q. Which of the following is a synonym of the word curtailment?

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Consider the following statements regarding Non-Banking Financial Companies. NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself. NBFCs cannot accept demand deposits. Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs.Which of the above statements is/are correct?a)Only 1b)1 and 3 onlyc)2 and 3 onlyd)1, 2 and 3e)1 and 2 onlyCorrect answer is option 'D'. Can you explain this answer?

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Consider the following statements regarding Non-Banking Financial Companies. NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself. NBFCs cannot accept demand deposits. Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs.Which of the above statements is/are correct?a)Only 1b)1 and 3 onlyc)2 and 3 onlyd)1, 2 and 3e)1 and 2 onlyCorrect answer is option 'D'. Can you explain this answer? for Banking Exams 2025 is part of Banking Exams preparation. The Question and answers have been prepared according to the Banking Exams exam syllabus. Information about Consider the following statements regarding Non-Banking Financial Companies. NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself. NBFCs cannot accept demand deposits. Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs.Which of the above statements is/are correct?a)Only 1b)1 and 3 onlyc)2 and 3 onlyd)1, 2 and 3e)1 and 2 onlyCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for Banking Exams 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding Non-Banking Financial Companies. NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself. NBFCs cannot accept demand deposits. Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs.Which of the above statements is/are correct?a)Only 1b)1 and 3 onlyc)2 and 3 onlyd)1, 2 and 3e)1 and 2 onlyCorrect answer is option 'D'. Can you explain this answer?.

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