Q. Consider the following statements regarding Non-Banking Financial Companies (NBFC’s):
1.It is a heterogeneous group of institutions performing financial intermediation.
2.They can do activities like agricultural, industrial, sale & purchase and construction of immovable property.
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

Answer: B

Explanation: NBFCs (Non-Banking Financial Companies) are fast emerging as an important segment of Indian financial system.

  • It is an heterogeneous group of institutions (other than commercial and co-operative banks) performing financial intermediation in a variety of ways, like accepting deposits, making loans and advances, leasing, hire purchase, etc.
  • They cannot have certain activities as their principal business—agricultural, industrial and sale[1]purchase or construction of immovable property.

Source: TMH – Ramesh Singh