Q. Consider the following statements about the Non-Banking Financial Companies (NBFCs) in India:
1. NBFCs cannot accept demand deposits.
2. All the NBFCs operating in India have to be registered with the RBI.
3. NBFCs form part of the payment and settlement system and can issue cheque drawn on itself.
4. Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation (DICGC) is not available to the depositors of deposit taking NBFCs.
Which of the statements given above is/are correct?
(a) 1 and 4
(b) 1, 2 and 3
(c) 4 only
(d) 2, 3 and 4

Answer : A

Explanation:

Statement 1 is correct: NBFCs cannot accept demand deposits.
Statement 2 is not correct: Not all NBFCs need to be registered with RBI. Companies that fall under the regulatory purview of other specialized bodies are exempt from RBI registration — for instance, insurance companies regulated by IRDAI, mutual funds overseen by SEBI, or venture capital funds don't need separate RBI registration.
Statement 3 is not correct: NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on themselves.
Statement 4 is correct: Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation (DICGC) is not available to depositors of deposit taking NBFCs.

Source:

https://www.rbi.org.in/commonman/Upload/English/FAQs/PDFs/ALLNBFC23042025.pdf