Question Bank - Banking & Financial Services

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NBFC for recovery of loans under the SARFAESI Act in the Union Budget 2020-21. (NBFC) eligibility limit was proposed to be reduced to an asset size of _______.

A.
400 Crore
B.
300 Crore
C.
200 Crore
D.
100 Crore

Solution:

The correct answer is 100 Crore. Sitharaman brought down the value of loans that can be introduced for debt recovery under the SARFAESI Act to Rs 20 lakh from Rs 50 lakh for NBFCs having a minimum asset size of Rs 100 crore. Hence, Option 4 is correct. Additional InformationNon-Banking Financial Company (NBFC):A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property. A non-banking institution which is a company and has principal business of receiving deposits under any scheme or arrangement in one lump sum or in installments by way of contributions or in any other manner is also a non-banking financial company (Residuary non-banking company).

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