Question 1

Under the RBI's Scale Based Regulation (SBR) for NBFCs, the "Top Layer" typically consists of:

All Deposit-taking NBFCs.NBFCs specifically identified by RBI as warranting enhanced regulatory supervision due to systemic risk.All NBFCs with asset size > ?1000 Crore.NBFC-Micro Finance Institutions only.

View Explanation

The SBR framework has four layers: Base, Middle, Upper, and Top. The Top Layer remains empty by default and is populated only if the RBI identifies specific NBFCs from the Upper Layer that pose extreme systemic risk and require tighter supervision.

Question 2

An NBFC-Factor is a company whose financial assets in the factoring business constitute at least what percentage of its total assets?

75%100%50%25%

View Explanation

To be registered as an NBFC-Factor, a company must have at least 50% of its total assets in the factoring business, and its income derived from factoring must not be less than 50% of its gross income.

Question 3

Which of the following entities is NOT regulated by the Reserve Bank of India (RBI) even though it is an NBFC?

Chit Fund CompaniesInvestment CompaniesLoan CompaniesHousing Finance Companies (HFCs)

View Explanation

Chit Fund companies are regulated by the State Governments under the Chit Funds Act, 1982. Housing Finance Companies are now regulated by RBI (transferred from NHB).

Question 4

A "Core Investment Company" (CIC) is an NBFC that holds not less than what percentage of its net assets in the form of investment in equity shares, preference shares, bonds, debentures, debt or loans in group companies?

90%75%60%50%

View Explanation

A CIC is a specialized NBFC whose business is acquisition of shares and securities. It must hold at least 90% of its net assets in the form of investment in group companies, with at least 60% in equity shares.

Question 5

In the RBI's Scale Based Regulation for NBFCs, the "Middle Layer" (NBFC-ML) comprises all Deposit taking NBFCs and Non-Deposit taking NBFCs with asset size of:

?1000 Crore and above?500 Crore and above?100 Crore and above?5000 Crore and above

View Explanation

The Middle Layer includes all Deposit taking NBFCs (NBFC-Ds) irrespective of asset size, and Non-Deposit taking NBFCs with asset size of ?1000 Crore and above.

Question 6

Infrastructure Debt Funds (IDF-NBFCs) are permitted to raise funds primarily through:

Demand Deposits.Equity shares from public.Issue of Rupee or Dollar denominated bonds of minimum 5-year maturity.Short-term commercial paper.

View Explanation

IDF-NBFCs are setup to facilitate long-term debt into infrastructure sectors. They raise resources through issue of bonds of minimum 5-year maturity.

Question 7

Can a complaint against a Non-Banking Financial Company (NBFC) be filed under the RBI Integrated Ombudsman Scheme?

No, only banks are covered.No, NBFCs have a separate regulator.Yes, for all NBFCs with asset size of ?100 crore and above (excluding some categories like Core Investment Companies).Yes, but only for NBFCs accepting deposits.

View Explanation

The Integrated Ombudsman Scheme covers NBFCs (both deposit-taking and non-deposit taking) having customer interface and asset size of ?100 crore or more.

Question 8

An NBFC is classified as a "Systemically Important Non-Deposit taking NBFC" (NBFC-ND-SI) if its asset size is:

?5000 Crore or more?100 Crore or more?1000 Crore or more?500 Crore or more

View Explanation

NBFC-ND-SI are those non-deposit taking NBFCs with an asset size of ?500 crore and above. They are subject to stricter prudential norms compared to smaller NBFCs.

Question 9

Under the "Integrated Ombudsman Scheme, 2021", what is the maximum compensation amount that the Ombudsman can award for loss suffered by the complainant?

?10 Lakh?20 Lakh?50 Lakh?1 Crore

View Explanation

The Ombudsman has the power to award compensation up to ?20 Lakh for any loss suffered by the complainant due to the act or omission of the Regulated Entity. Additionally, up to ?1 Lakh can be awarded for mental harassment.

Question 10

Are Non-Banking Financial Companies (NBFCs) required to maintain Liquidity Coverage Ratio (LCR)?

Yes, all Deposit taking NBFCs and Non-Deposit taking NBFCs with asset size ?5000 cr and above.No, only banks are required.Yes, but only Housing Finance Companies.Yes, all NBFCs irrespective of size.

View Explanation

To strengthen liquidity risk management, RBI mandated LCR for larger NBFCs (Asset size = ?5000 Cr) and all deposit-taking NBFCs.

JAIIB Quiz

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