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Q1. What is the cost of filing a complaint with the NBFC Ombudsman ?

(a) No charge

(b) Rs. 100

(c) Rs. 500

(d) Rs. 1000

(e) May vary accordingly

Ans: a

Solution: The Ombudsman Scheme for Non-Banking Financial Companies, 2018 (the Scheme), is an expeditious and
cost free apex level mechanism for resolution of complaints of customers of NBFCs, relating to certain services rendered
by NBFCs.

Q2. In which country the South Asian Association for Regional Cooperation (SAARC) was established with the
signing of the SAARC Charter on 8 December 1985 ?

(a) Afghanistan

(b) Bhutan

(c) India

(d) Bangladesh

(e) Maldives

Ans: b

Solution: The first summit was held in Dhaka, Bangladesh on 7–8 December 1985 and was attended by the Government
representative and president of Bangladesh, Maldives, Pakistan and Sri Lanka, the kings of Bhutan and Nepal, and the
prime minister of India.

Q3. What are the processing charges that an NBFC-MFI can levy on its customers ?

(a) No Charge

(b) 1%

(c) 3%

(d) 5%

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(e) 10%

Ans: b

Solution: Processing charges by NBFC-MFIs shall not be more than 1% of gross loan amount. Processing fee are the
charges levied on the borrower by the bank to provide the services or initiate the process be it a loan or credit card
transaction. This fee is non-refundable even if the loan doesn't get sanctioned. In some cases, this fee can be waived off by
the lender on special requests.

Q4. In context to NBFC-MFI, what does SRO stands for ?

(a) Social Responsibility Organisation

(b) Socio-Economic Regulatory Organisation

(c) Self-Regulatory Organisation

(d) Subordinate Referendum Order

(e) None of these

Ans: c

Solution: A self-regulatory organization (SRO) is an organization that exercises some degree of regulatory authority
over an industry or profession. The regulatory authority could exist in place of government regulation, or applied in
addition to government regulation.

Q5. Which of the following is true regarding NBFC ?

(a) NBFC cannot accept demand deposits.

(b) NBFCs do not form part of the payment and settlement system

(c) NBFC cannot issue cheques drawn on itself

(d) Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs

(e) All are true

Ans: d

Solution: NBFCs lend and make investments and hence their activities are akin to that of banks; however there are a few
differences as given below :

i. NBFC cannot accept demand deposits ;

ii. NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself ;

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iii. Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors
of NBFCs, unlike in case of banks.

Q6. As defined in the section 45-IA of the RBI Act, 1934, no Non-Banking Financial company can commence or carry on
business without having a Net Owned Funds of -

(a) Rs. 10 lakhs

(b) Rs. 25 lakhs

(c) Rs. 50 lakhs

(d) Rs. 75 lakhs

(e) Rs. 1 Crore

Ans: b

Solution: In terms of Section 45-IA of the RBI Act, 1934 it is mandatory for a company to obtain Certificate of
Registration (CoR) from Reserve Bank of India (RBI) before commencing or to carry on business of a non-banking
financial institution. And the net value is 25 lakhs.

Q7. What is the asset size required for a NBFC to consider it as a Systemically Important NBFC ?

(a) 50 crore

(b) 100 Crore

(c) 250 Crore

(d) 500 Crore

(e) 1000 crore

Ans: d

Solution: NBFCs whose asset size is of 500 cr or more as per last audited balance sheet are considered as systemically
important NBFCs. The rationale for such classification is that the activities of such NBFCs will have a bearing on the
financial stability of the overall economy.

Q8. What does R stand for in the abbreviation RNBC ?

(a) Residuary

(b) Regional

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(c) Regulatory

(d) Ramification

(e) None of these.

Ans: a

Solution: Residuary Non-Banking Company is a class of NBFC which is a company and has as its principal business
the receiving of deposits, under any scheme or arrangement or in any other manner and not being investment, asset
financing, loan company. These companies are required to maintain investments as per directions of RBI, in addition to
liquid assets. The functioning of these companies is different from those of NBFCs in terms of method of mobilisation of
deposits and requirement of deployment of depositors' funds. However, Prudential Norms Directions are applicable to
these companies also.

Q9. What does C stand for in the abbreviation POCSO ?

(a) Children

(b) Crime

(c) Credit

(d) Company

(e) Child

Ans: e

Solution: The Protection of Children from Sexual Offences (POCSO) Act, 2012 was enacted to provide a robust legal
framework for the protection of children from offences of sexual assault, sexual harassment and pornography, while
safeguarding the interest of the child at every stage of the judicial process.

Q10. What is the threshold limit of assets upto which a Core Investment Company is exempted from registration in terms
of section 45NC of the RBI Act 1934 ?

(a) Rs. 100 Crore

(b) Rs. 200 Crore

(c) Rs. 500 Crore

(d) Rs. 1000 Crore

(e) No such limit is defined

Ans: a

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Solution: Power of Bank to exempt.—The Bank, on being satisfied that it is necessary so to do, may declare by
notification in the Official Gazette that any or all of the provisions of this Chapt­er shall not apply to a non-banking
institution or a class of non-banking institutions or a non-banking financial company or to any class or non-banking
financial companies either generally or for such period as may be specified, subject to such conditions, limitations or
restrictions as it may think fit to impose. Existing CICs which were exempted from registration in the past and have an
asset size of less than Rs 100 crore are exempted from registration in terms of section 45NC of the RBI Act 1934, as
stated in Notification No. DNBS.

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