Non-Banking Financial Institutions: Development, Regulation and Supervision
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Central Banking (Elective) — CAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
Why are NBFCs referred to as 'shadow banks'?
NBFCs perform bank-like financial intermediation such as accepting deposits, extending credit, and investing, but operate without a full banking licence and face lighter regulatory oversight compared to banks.
What does NBFC-MFI primarily provide to economically disadvantaged borrowers?
Collateral-free small ticket loans to economically disadvantaged groups.
What distinguishes NBFCs from commercial banks in terms of regulatory treatment?
NBFCs face different and often lighter regulation than commercial banks, even though both perform similar financial intermediation functions.
What is the principal function of an NBFC-P2P lending platform?
Provides an online platform connecting lenders and borrowers directly.
Do NBFCs operate illegally because they are called 'shadow banks'?
No, NBFCs are not illegal entities; the term 'shadow' refers to their lighter regulatory oversight relative to banks, not to any illegality.
What does NBFC-AA stand for and what is its primary role?
Account Aggregator; collects and consolidates customer financial asset information.
What core financial functions do NBFCs perform that make them similar to banks?
NBFCs accept deposits, extend credit, and invest funds, performing financial intermediation roles that are similar to those of commercial banks.
What is the primary purpose of an NBFC-IDF?
Facilitates flow of long-term debt into post-commencement infrastructure projects.
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