Which one of the following statements about Non-Banking Financial Companies (NBFCs) is <strong>NOT</strong> correct?
- A. NBFCs cannot accept demand deposits.
- B. NBFCs cannot give loans. ✓
- C. NBFCs cannot issue cheques drawn on themselves.
- D. NBFCs cannot offer deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation.
Correct Answer: B. NBFCs cannot give loans.
Explanation
NBFCs actively provide loans and advances. The statement that they cannot give loans is completely incorrect. They do, however, lack the ability to issue cheques or accept demand deposits.
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