Q. Consider the following statements about a Non-Banking Financial Company (NBFC): An NBFC cannot accept demand deposits; An NBFC is not a part of the payment and settlement system An NBFC cannot issue cheques drawn on itself Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available for NBFC depositors Which among the above is/ are correct statements?
Answer: 1, 2, 3, 4
Notes:

1. An NBFC cannot accept demand deposits: This statement is correct. Accepting demand deposits is a key function of commercial banks, not NBFCs.
2. An NBFC is not a part of the payment and settlement system: This statement is also correct. NBFCs are not authorized to be part of the payment and settlement infrastructure like RTGS, NEFT etc.
3. An NBFC cannot issue cheques drawn on itself: This statement is correct. Only banks have the authorization to issue cheques payable on demand. NBFCs do not have this privilege.
4. Deposit insurance facility of DICGC is not available for NBFC depositors: This statement is correct. Deposit insurance is only for bank depositors, not for those who deposit funds with NBFCs.

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