OTHER GROUP COMPANIES
market

Cross this checklist before parking funds with an NBFC

An investor wanting to place deposit with an NBFC must ensure that it is registered with RBI and is authorised to accept deposits

June 03, 2013 11:16 IST | India Infoline News Service
The Reserve Bank of India (RBI) alerted depositors of certain customary safeguards before investing their money in any scheme run by non-banking financial companies (NBFCs).
“The advisory is par
t of the Frequently Asked Questions (FAQs) issued by the central bank. The FAQs explain in details the various kinds of financial entities and the regulations governing them,” RBI said in a press release on Friday.

The advisory also listed as to where people can lodge complaints in case some financial entity is found to be conducting business unauthorisedly or does not repay the deposits.
The statement said that an investor wanting to place deposit with an NBFC must ensure that it is registered with RBI and is authorised to accept deposits.

This can be checked from the list of deposit taking NBFCs published on the RBI website, it said.

The FAQs also advise investors to immediately register their complaints in case they notice any company accepting deposits unauthorisedly or not repaying the principal and/or interest with the local police or with the Economic Offences Wing of the State Police and in case the entity is a company, to register their complaints with the Registrar of Companies, the RBI said.

NBFCs have to prominently display the Certificate of Registration (CoR) issued by RBI on its site. If an NBFC is authorised to accept public deposit, the certificate reflects that.
RBI does not guarantee the repayment of deposits accepted by NBFCs. NBFCs cannot use the name of the RBI in any manner while conducting their business.

Currently, the maximum interest rate that an NBFC can pay to a depositor should not exceed 12.5%. The RBI, however, keeps changing these interest rates depending on the macro-economic environment, the press release said further.

OPEN A DEMAT ACCOUNT & Get
FREE Benefits Worth 5,000

FEATURED ARTICLE

BLOGS

Open Demat Account

  • 0

    Per Order for ETF & Mutual Funds Brokerage

  • 20

    Per Order for Delivery, Intraday, F&O, Currency & Commodity