Question

Under Section 45-IB of the RBI Act, NBFCs accepting deposits must maintain liquid assets as a percentage of their what?

Q: Answer-Under Section 45-IB of the RBI Act, NBFCs accepting deposits must maintain liquid assets as a percen...

Section 45-IB of the Reserve Bank of India Act requires deposit-taking NBFCs to maintain liquid assets, such as approved securities, as a percentage of their deposits or liabilities as specified by the RBI. This is analogous to the statutory liquidity requirement for banks. The provision ensures that NBFCs hold sufficient liquid assets to meet their obligations to depositors. It is a prudential safeguard protecting the interests of NBFC depositors.