Question

Which of the following most accurately distinguishes an NBFC from a scheduled commercial bank?

Q: Answer-Which of the following most accurately distinguishes an NBFC from a scheduled commercial bank?

The two most critical distinctions between NBFCs and banks are 1 Demand Deposits Banks can accept current and savings account deposits repayable on demand NBFCs cannot. Some deposit-taking NBFCs NBFC-D can accept fixed-term deposits, but not demand deposits. 2 Lender of Last Resort The RBI provides emergency liquidity to banks in distress NBFCs do not have this backstop. Both NBFCs and banks are regulated by the RBI, but under different frameworks. CRR and SLR do not apply to NBFCs. NBFCs are not required to list on stock exchanges as a category.

A NBFCs are regulated by SEBI while banks are regulated by RBI

B NBFCs cannot accept demand deposits repayable on demand (current/savings accounts) and do not have access to RBI's Lender of Last Resort facility, unlike banks

C NBFCs can issue currency notes for transactions while commercial banks cannot

D NBFCs must maintain CRR and SLR in the same manner as commercial banks

E NBFCs are required to list on stock exchanges while commercial banks are exempt from listing

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