With reference to the Non-banking Financial Companies (NBFCs) in India, consider the following statements:
1. They cannot engage in the acquistion of securities issued by the government
2. They canot accept demand deposits like Savings Account
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|
Ans. B Exp: Non-Banking Finance Company (NBFC) is a company registered under the Companies Act, 1956 and is engaged in the business of loans and advances, acquisition at shares/stock/bonds/debentures/ securities issued by government or local authority or other securities of marketable nature, leasing, hire-purchase, insurance business, chit business. NBFCs are finance companies but not banks and are thus not allowed to function as bank but to take deposits in other forms like fixed deposits. They are not allowed to open savings bank accounts and are not members of the clearing houses.