Which of the following governs Non-Banking Financial Companies (NBFC)?

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SBI PO Mains Memory Based Paper (Held on:29 January 2021)
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  1. Central government
  2. Reserve Bank of India
  3. Small Industries Development Bank of India
  4. Industrial Finance Corporation of India
  5. Securities and Exchange Board of India

Answer (Detailed Solution Below)

Option 2 : Reserve Bank of India
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Detailed Solution

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The correct answer is the Reserve Bank of India.

Key Points

  • With the enactment of the RBI (Amendment) Act, 1977, the RBI (Reserve Bank of India) controls the functioning of NBFCs.
  • NBFCs as a whole account for 11.2% of assets of the total financial system.
  • It is a registered company under the Companies Act, 1956.
  • Following are few important banks to remember : 
  1. SIDBI  ‘Small Industries Development Bank of India’, Its Headquartered in Lucknow.
  2. EXIM ‘Export-Import Bank of India’, Its Headquartered in Mumbai.
  3. NABARD ‘National Bank for Agriculture and Rural Development’, Its Headquartered in Mumbai.
  4. NHB ‘National Housing Bank’, Its Headquartered in New Delhi.
  5. IFCI ‘Industrial Finance Corporation of India’, Its Headquartered in New Delhi. 
  6. The Securities and Exchange Board of India (SEBI), It is established in 1992, headquartered in Mumbai.
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