Q. Consider the following statements regarding the Non-Banking Financial Companies (NBFCs):
1.NBFCs cannot accept demand deposits, while banks can accept.
2.NBFCs are regulated by SEBI.
3.Agriculture is a significant focus area for infrastructural funding by NBFCs.
How many of the statements given above are correct?
Explanations –
Statement 1 is correct. NBFCs are prohibited from accepting demand deposits under RBI regulations. Demand deposits (such as savings and current accounts) are a feature exclusive to banks as they are part of the payment and settlement system.
Statements 2 and 3 are incorrect. NBFCs are primarily regulated by the Reserve Bank of India (RBI). However, certain NBFC activities, such as venture capital or merchant banking, may fall under SEBI’s purview. The overarching regulatory authority for NBFCs remains the RBI. While NBFCs may provide some financing for agriculture-related activities, their primary focus in infrastructure funding is on sectors like real estate, power, roads, and urban infrastructure. Agriculture is not a major focus area for infrastructural funding by NBFCs.
Source: The Hindu
