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Question No. 370Interactive Test Mode
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Q370. With reference to the Non-banking Financial Companies (NBFCs) in India, consider the following statements: 1. They cannot engage in the acquisition of securities issued by the government. 2. They cannot accept demand deposits like Savings Account Which of the statements given above is/ are correct?

With reference to the Non-banking Financial Companies (NBFCs) in India, consider the following statements:

  1. They cannot engage in the acquisition of securities issued by the government.
  2. They cannot accept demand deposits like Savings Account Which of the statements given above is/ are correct?
Select the correct option below (or cross out options to eliminate)

Official Answer Key & Detailed Solution

Ready to check the official UPSC Answer Key?

Click any option above to test yourself under exam conditions, or reveal the explanation directly.

Official UPSC Answer KeyUPSC Prelims 2010 • Indian Economy

Correct Answer: Option (B) — 2 only

Concept & Option Breakdown

Standard Reference Verified

Statement 1 is incorrect: NBFCs can engage in the acquisition of government securities, shares, bonds, debentures, and other marketable securities. Statement 2 is correct: Unlike commercial banks, NBFCs are prohibited from accepting demand deposits (such as savings and current accounts payable on demand). They can only accept term/fixed deposits subject to specific RBI regulatory permissions.

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Question Specifications & Syllabus Mapping

Examination & YearUPSC Civil Services Preliminary Examination 2010 (Q370)
Paper & Marking SchemeGS Paper I • 2 Marks (-0.66 Negative for incorrect response)
Syllabus Subject & TopicIndian Economy → Banking & Financial System
Official Answer KeyOption (B) — 2 only

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Frequently Asked Questions — UPSC Prelims 2010 Q370

What is the official answer for UPSC Prelims 2010 GS Paper I Question 370 (Indian Economy)?

The official UPSC answer key for this 2010 Indian Economy (Banking & Financial System) question is Option (B): "2 only". Correct attempts carry 2 Marks with -0.66 Negative penalty for wrong answers.

Which UPSC Prelims syllabus topic does this 2010 question belong to?

This question belongs to GS Paper I under the subject "Indian Economy" and micro-topic "Banking & Financial System". You can explore all repeated questions from Banking & Financial System in Acme AI's 3D Prelims PYQ Realm or practice 50 full-length and sectional tests in the APT Prelims Test Series.

How can I solve this Banking & Financial System UPSC Prelims question using option elimination?

To solve Banking & Financial System questions in UPSC Prelims, identify extreme modifiers, verify core NCERT conceptual definitions, and eliminate mutually contradictory statement pairs before locking your final option.

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