Consider the following statements about NBFC deposits:

  1. These deposits are unsecured
  2. The deposits are not backed by deposit insurance

  Which of the above statements is/are correct?

Answer: [C] Both 1 & 2

Both are correct statements
In contrast to traditional commercial banks where the sum deposited is secured and is backed by deposit insurance, NBFC deposits are unsecured and are not backed by deposit insurance.

This question is a part of GKToday's Integrated IAS General Studies Module