(a) NBFC facilitating credit spread across the global financial system.
(b) These institutions are subject to supervisory control of central banks.
Of the above, which statement/s is/are true ? Select the answer from the codes given below :
Shadow Banking Analysis
The question asks to identify the correct statement(s) about shadow banking.
Statement (a): NBFCs and Credit Spread
Non-Banking Financial Companies (NBFCs) are key players in the shadow banking system. They perform credit intermediation functions, similar to banks, but operate outside the traditional banking regulations. This allows them to facilitate the flow and spread of credit throughout the global financial system.
Therefore, statement (a) is considered true.
Statement (b): Supervisory Control
A defining characteristic of shadow banking entities, including many NBFCs, is that they are typically subject to less direct and comprehensive supervisory control by central banks compared to traditional, deposit-taking banks. While regulatory oversight exists, it often differs in scope and intensity.
Therefore, statement (b) is considered false.
Final Conclusion
Based on the analysis, only statement (a) is true regarding shadow banking.
Important Questions from NBFCs
Non - Banking Financial Companies can be classified as:
a) Asset Finance Company (AFC)
b) Investment Company (IC)
c) Loan Company (LC)
d) Foreign Trade Company (FTC)
Choose the correct answer from the options given below:
Which one of the following is the main objective of IFCI ?
What is the Minimum Net Owned Fund for an Non-Banking Financial Company (NBFC) as mandated by RBI?
NBFCs in India are companies that are registered under which of the following Act?
Which of the following governs Non-Banking Financial Companies (NBFC)?
