Topic Details (Notes format)

Shadow Banking and NBFC Sector

Subject: Economics

Book: Comprehensive Indian Economy - Additional Topics

Non-banking financial companies (NBFCs) offer credit outside traditional banking channels—supporting SMEs, vehicle loans, and consumer finance. However, unbridled growth risks liquidity mismatches and defaults. The IL&FS crisis highlighted the need for tighter RBI oversight on asset-liability management. Exams focus on how NBFC expansions complement banks yet require prudent regulation to prevent systemic shocks and ensure depositors’ protection.

Practice Questions

Which of the following is NOT an example of an indirect tax?

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What is meant by “structural unemployment”?

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Which term refers to an economy that has elements of both capitalism and socialism?

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What does “inclusive banking” mean?

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What is the objective of the Goods and Services Tax (GST)?

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What is the main function of the Reserve Bank of India (RBI)?

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What is the meaning of “disguised unemployment”?

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What is the main aim of Public Distribution System (PDS) in India?

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Which of the following is an example of a renewable resource?

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What is meant by “monetary policy”?

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