Economics · Banking in India
Which of the following constitutes a key distinction between Non-Banking Financial Companies (NBFCs) and traditional commercial banks in India?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Banks can issue equity shares, while NBFCs are prohibited from issuing equity
- 2NBFCs cannot accept demand deposits and cannot issue cheques drawn on themselves, unlike banks✓
- 3Banks are exclusively regulated by SEBI, while NBFCs are regulated only by the Ministry of Finance
- 4NBFCs always operate with unlimited liability structures for their directors
Correct answer
NBFCs cannot accept demand deposits and cannot issue cheques drawn on themselves, unlike banks
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