Correct Answer: Reserve Bank of India (RBI)

Solution : The correct answer is (a) Reserve Bank of India (RBI)

The correct institution responsible for regulating and supervising the functioning of non-banking financial companies (NBFCs) in India is the Reserve Bank of India (RBI).

The RBI is the primary regulatory authority for NBFCs in India. It formulates regulations, guidelines, and prudential norms for NBFCs and oversees their operations. The RBI issues licenses to NBFCs, specifies the regulatory framework, sets capital adequacy norms, and monitors their compliance with regulatory requirements. The RBI's objective is to ensure the stability and resilience of the NBFC sector and protect the interests of depositors and consumers.