UES 9. What are the salient features of NBFCs regulations which the depositor may note at the times of investment?
ANS 9. Some of the important regulations relating to acceptance of deposits by NBFCs are as under: i) The NBFCs are allowed to accept/renew public deposits for a minimum period of 12 months and maximum period of 60 months. They cannot accept deposits repayable on demand.ii) NBFCs cannot offer interest rates higher than the ceiling rate prescribed by RBI from time to time. The present ceiling is 11 per cent per annum. The interest may be paid or compounded at rests not shorter than monthly rests. iii) NBFCs cannot offer gifts/incentives or any other additional benefit to the depositors.iv) NBFCs (except certain AFCs) should have minimum investment grade credit rating. v) The deposits with NBFCs are not insured.vi) The repayment of deposits by NBFCs is not guaranteed by RBI.vii) There are certain mandatory disclosures about the company in the Application Form issued by the company soliciting deposits.
