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 a feature of a command economy?

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

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Which of the following factors is NOT included in the calculation of Human Development Index (HDI)?

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What is the meaning of “supply-side economics”?

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What is meant by “crowding out” in economics?

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What is the primary purpose of Special Economic Zones (SEZs)?

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What does the “Human Development Index” measure?

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What does the term “capital account” refer to in the balance of payments?

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What is “open market operations” (OMO)?

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What is “currency devaluation”?

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