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UPSC 2010: With reference to the Non-banking Financial Companies (NBFCs) in India, consider the following statements: 1. They cannot engage in the acquisition of securities issued by the government. 2. They cannot 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
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Not attemptedCorrect Answer: (b) 2 only
NBFCs are permitted to conduct business that includes acquisition of shares, stocks, bonds and other securities—including Government securities—so Statement 1 is incorrect. However, the RBI explicitly bars NBFCs from accepting demand deposits such as savings or current-account money, hence Statement 2 is correct. Therefore only Statement 2 is true. ([en.wikipedia.org](https://en.wikipedia.org/wiki/NBFC_and_MFI_in_India))
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What is the correct answer to this UPSC 2010 Indian Economy question?▼
The correct answer is option (b): 2 only. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.
Which year was this Banking & Financial Sector question asked in UPSC Prelims?▼
This question was asked in UPSC CSE Prelims 2010, GS Paper 1, as Question 25. It falls under Indian Economy > Banking & Financial Sector.
What is the difficulty level of this UPSC question?▼
This question is rated "moderate". It requires sound conceptual understanding of the topic.
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UPSC has asked 48 questions from Banking & Financial Sector (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.