Page 102 - DMGT512_FINANCIAL_INSTITUTIONS_AND_SERVICES

Unit 7: Non-banking Financial Companies

7.8 Keywords Notes

Demand deposits: Funds deposited at a depository institution that are payable on demand —
immediately or within a very short period.

Net owned funds: According to the RBI, Net owned Fund will consist of paid up equity capital,
free reserves, balance in share premium account and capital reserves representing surplus arising
out of sale proceeds of assets but not reserves created by revaluation of assets.

7.9 Self Assessment

Fill in the blanks:
1. SIDBI was established to empower the .................., .................................... enterprises (MSME)
sector.
2. IFCI was established to cater to the financial needs of industrial concerns in ..............................
and ........................... sectors.
3. IFCI has promoted ..........................., primarily in less developed states.
4. The forte of NBFCs has been credit delivery to areas not covered by ........................... and
financial institution.
5. .............................. are financial institutions that provide banking services without meeting
the legal definition of a bank.
6. IFCI has played a key role in the development of cooperatives in the ..................... and
........................... sectors.

7. 'Deposit' includes and shall be deemed always to have included any receipt of money by
way of ..................... or in any other form.
8. NBFCs cannot accept deposits from ........................ except deposits by debit to NRO account
of NRI provided such amount does not represent inward remittance or transfer from
NRE/FCNR (B) account.
9. All non-banking financial companies are to be registered under the ......................
10. The role of NBFCs has become increasingly important from both the macro economic
perspective and the structure of the Indian .................. system.

11. ........................ has diversified its activities in the field of merchant banking, syndication of
loans, formulation of rehabilitation programmes, assignments relating to amalgamations
and mergers, etc.
12. Deposit insurance facility of DICGC is not available for NBFC depositors unlike in case of
...................
13. ..................... under the new dispensation has been entrusted with the overall responsibility
to look after the interests of SFCs, including provision of adequate refinance facilities.
14. IFCI has been able to achieve a financial turnaround with the consistent support and
cooperation of all its ......................
15. The main handicap of an NBFC is the small size of their .................., ........................ and their
....................., which is region specific.

7.10 Review Questions

1. What is the rationale behind the existence of industrial development corporations at the
state level in India?

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