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Consider the following statements regarding the National Urban Co-operative Finance and Development Corporation:
1. It is set up as an umbrella organisation for the Urban Cooperative Banks.
2. It operates as a Non-Banking Finance Company.
Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'C'. Can you explain this answer?
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Most Upvoted Answer
Consider the following statements regarding the National Urban Co-oper...
The correct answer is option C: Both 1 and 2.
Explanation:
National Urban Co-operative Finance and Development Corporation (NUCFDC) plays a crucial role in supporting the Urban Cooperative Banks (UCBs) in India. Let's delve into the two statements provided in the question to understand the functions and nature of NUCFDC:
1. Umbrella Organisation for UCBs:
- **Role:** NUCFDC is indeed set up as an umbrella organisation for the Urban Cooperative Banks (UCBs) in India. It provides financial assistance, refinance facilities, and other support services to these UCBs to strengthen and develop the urban cooperative credit structure in the country.
- **Significance:** By acting as an umbrella organisation, NUCFDC plays a pivotal role in promoting the growth and stability of UCBs, which are crucial for catering to the financial needs of urban areas and promoting financial inclusion.
2. Non-Banking Finance Company (NBFC):
- **Nature:** NUCFDC operates as a Non-Banking Finance Company (NBFC). As an NBFC, it engages in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by the government or local authority or other securities of a like nature, leasing, hire-purchase, insurance business, and other financial activities.
- **Regulation:** Being an NBFC, NUCFDC falls under the regulatory purview of the Reserve Bank of India (RBI) and has to comply with the regulations and guidelines set by the central bank for NBFCs operating in India.
In conclusion, both statements are correct. NUCFDC serves as an umbrella organisation for UCBs, providing them with financial assistance and support, while also functioning as an NBFC under the regulatory framework of the RBI. This dual role underscores the importance of NUCFDC in facilitating the growth and stability of the urban cooperative credit structure in India.
Explanation:
National Urban Co-operative Finance and Development Corporation (NUCFDC) plays a crucial role in supporting the Urban Cooperative Banks (UCBs) in India. Let's delve into the two statements provided in the question to understand the functions and nature of NUCFDC:
1. Umbrella Organisation for UCBs:
- **Role:** NUCFDC is indeed set up as an umbrella organisation for the Urban Cooperative Banks (UCBs) in India. It provides financial assistance, refinance facilities, and other support services to these UCBs to strengthen and develop the urban cooperative credit structure in the country.
- **Significance:** By acting as an umbrella organisation, NUCFDC plays a pivotal role in promoting the growth and stability of UCBs, which are crucial for catering to the financial needs of urban areas and promoting financial inclusion.
2. Non-Banking Finance Company (NBFC):
- **Nature:** NUCFDC operates as a Non-Banking Finance Company (NBFC). As an NBFC, it engages in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by the government or local authority or other securities of a like nature, leasing, hire-purchase, insurance business, and other financial activities.
- **Regulation:** Being an NBFC, NUCFDC falls under the regulatory purview of the Reserve Bank of India (RBI) and has to comply with the regulations and guidelines set by the central bank for NBFCs operating in India.
In conclusion, both statements are correct. NUCFDC serves as an umbrella organisation for UCBs, providing them with financial assistance and support, while also functioning as an NBFC under the regulatory framework of the RBI. This dual role underscores the importance of NUCFDC in facilitating the growth and stability of the urban cooperative credit structure in India.
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Community Answer
Consider the following statements regarding the National Urban Co-oper...
Recently, the union Cooperation Minister launched the National Urban Co-operative Finance and Development Corporation Limited (NUCFDC).
- It is the umbrella organisation for the Urban Cooperative Banks.
- Aim: It aims to ensure specialized functions and services to cooperative banks, facilitate communication between banks and regulators, and address challenges faced by Urban Cooperative Banks.
- Also to modernize and strengthen the Urban Cooperative Banking Sector, which will benefit both the banks and their customers.
- It has received a Certificate of Registration from the Reserve Bank of India to operate as a Non-Banking Finance Company.
- It will also operate as a Self-Regulatory Organisation for the sector.
Hence both statements are correct.
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Consider the following statements regarding the National Urban Co-operative Finance and Development Corporation:1. It is set up as an umbrella organisation for the Urban Cooperative Banks.2. It operates as a Non-Banking Finance Company.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?
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