Exp) Option a is the correct answer.

A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 or Companies Act, 2013, and engaged in the business of loans and advances, acquisition of shares/ stocks/ bonds/ debentures/ securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, etc., as their principal business.

Statement 1 is correct: NBFCs cannot accept demand deposits. They cannot accept deposits repayable on demand.

Statement 2 is incorrect: All the NBFCs operating in India do not have to be registered with the RBI. While the RBI mandates registration for most NBFCs under Section 45-IA of the RBI Act, it provides specific exemptions to avoid overlapping regulations.

• Section 45-IA of the RBI Act, 1934, no company can commence or carry on business of a non-banking financial institution without obtaining a certificate of registration from the Reserve Bank and without having a Net Owned Funds (NOF) of ₹10 crore with effect from October 01, 2022.
• However, to obviate dual regulation, certain categories of NBFCs which are regulated by other regulators are exempted from the requirement of registration with the Reserve Bank viz., Alternative Investment Fund/ Merchant Banking companies/ Stock broking companies registered with SEBI; Insurance Company holding a valid Certificate of Registration issued by IRDA; Nidhi companies as notified under relevant provisions of the Companies Act, 1956; Chit companies doing the business of chits under the Chit Funds Act, 1982.

Statement 3 is incorrect: NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself.

Statement 4 is correct: Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation (DICGC) is not available to depositors of deposit taking NBFCs.

Source:) https://www.rbi.org.in/commonperson/english/scripts/FAQs.aspx?Id=1167