Banking Awareness for Upcoming Exams Set 5 (NBFC)

This set contains banking awareness questions for various upcoming exams like SBI PO, IBPS PO, Clerk and insurance exams. This set contains questions from the topic :ย Non-Banking Financial Company (NBFC).

  1. A Non-Banking Financial Company (NBFC) is a company registered under the _________ .
    A) Reserve Bank of India Act, 1934
    B) Banking Regulation Act, 1949
    C) Companies Act, 1956
    D) Payment and Settlement Systems Act, 2007
    View Answer
    Option C
    Explanation: A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956(Section 3) engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property.
  2. For a company to register as a NBFC it should have a minimum net owned fund of _____.
    A) Rs 25 lakh
    B) Rs 1 crores
    C) Rs 2 crores
    D) Rs 5 crores
    View Answer
    Option C
    Explanation: The minimum net owned fund should be Rs 2 crore. Earlier it was Rs 25 lakh, however recently in January 2017 it was revised to Rs 2 crore.
  3. Any NBFC is is considered systemically important NBFC when its asset size is of Rs ____ or more.
    A) Rs 100 Crore
    B) Rs 500 Crore
    C) Rs 250 Crore
    D) Rs 750 Crore
    View Answer
    Option B
    Explanation: NBFCs whose asset size is of Rs 500 cr or more as per last audited balance sheet are considered as systemically important NBFCs.
  4. Which of the following is true about NBFC?
    (i) NBFC cannot accept demand deposits
    (ii) NBFCs cannot issue cheques drawn on itself
    (iii) deposit insurance facility of DICGC is not available to depositors of NBFCs.
    A) Only (i) and (ii)
    B) Only (ii) and (iii)
    C) Only (i) and (iii)
    D) All are true
    View Answer
    Option D
    Explanation: All the three points mentioned above are true. These points differentiate NBFC and banks
  5. NBFCs are required to accept public deposit for a minimum period of ___ months?
    A) 6 months
    B) 12 months
    C) 18 months
    D) 24 months
    View Answer
    Option B
    Explanation: The NBFCs are allowed to accept/renew public deposits for a minimum period of 12 months . They cannot accept deposits repayable on demand.
  6. NBFCs are required to accept public deposit for a maximum period of ___ months?
    A) 36 months
    B) 48 months
    C) 60 months
    D) 120 months
    View Answer
    Option C
    Explanation: The NBFCs are allowed to accept/renew public deposits for a minimum period of 12 months and maximum period of 60 months.
  7. What is the present ceiling limit of interest rate that NBFCs can offer ?
    A) 9%
    B) 12%
    C) 12.5%
    D) 14.5%
    View Answer
    Option C
    Explanation: NBFCs cannot offer interest rates higher than the ceiling rate prescribed by RBI from time to time. The present ceiling is 12.5 per cent per annum.
  8. Identify the false statement.
    A) NBFC should register under Section 3 of the companies Act, 1956
    B) Nomination facility is available to the depositors of NBFCs
    C) The deposits with NBFCs are not insured.
    D) The repayment of deposits by NBFCs is guaranteed by RBI.
    View Answer
    Option D
    Explanation: The repayment of deposits by NBFCs is not guaranteed by RBI.
  9. For working as a NBFC a company must get itself registers with _____ .
    A) RBI
    B) SEBI
    C) Finance Ministry
    D) NHB
    View Answer
    Option A
    Explanation: In terms of Section 45-IA of the RBI Act, 1934, no Non-banking Financial company can commence or carry on business of a non-banking financial institution without obtaining a certificate of registration from the Bank .
  10. Chit Fund companies are regulated under the Chit Fund Act, ____ .
    A) 1980
    B) 1981
    C) 1982
    D) 1983
    View Answer
    Option C
    Explanation: Chit Fund companies are regulated under the Chit Fund Act, 1982 Chit Funds comes under NBFC.

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35 Thoughts to “Banking Awareness for Upcoming Exams Set 5 (NBFC)”

  1. Sur(*-*)

    Thanku ๐Ÿ™‚

  2. Sanyasi Learnu Banegi SBI PO

    Any NBFC is is considered systemically important NBFC when its asset size is of Rs ____ or more.
    One doubt sir,,
    here for systematically important NBFCs ke liye—-500 cr
    for normal NBFCs assets size should be–100 cr?? m i right?

    1. Suraj

      see ques 2 and 3 are related;; when NBFC has minimum net owned fund od rs 2 crore; they can start functioning like NBFC. when their asset reach 500 crore then they are systematically important NBFC. So for normal NBFC asset size is Rs 2 crore. Now even in NBFC there are various types of specialised NBFC that is a detailed topic and these all have different asset criteria set by RBI. but basically if asked for normal nbfc u can answer rs 2 crore

      1. Sanyasi Learnu Banegi SBI PO

        Okay…Thank You.:))

  3. sachin shukla@Target SBI Mains

    ty.

  4. วŸสษฎษจำ„วŸ?

    thank-you ๐Ÿ™‚

  5. Ayushi

    4que m 2nd option ka meaning can nyone elaborate it ?

  6. Ravi Upadhyay

    thncx

  7. Sangita

    “NBFCs cannot issue cheques drawn on itself.” Please explain.

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