Practice question
A nonbank firm borrows through instruments stipulated to qualify as deposit substitutes and uses proceeds to purchase receivables. It argues that it cannot be a quasi-bank because it does not take ordinary savings deposits. Which is best?
- Ordinary savings deposits are indispensable to quasi-banking
- Its described function falls within the quasi-bank definition and requires the relevant authority
- Any purchase of paper is automatically banking
- The firm can self-exempt by calling itself a trader
- Only a trust beneficiary can purchase receivables
Legal references
- https://lawphil.net/statutes/repacts/ra2000/ra_8791_2000.html — RA 8791, sections 3, 4, 6 and 79–83
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