NBFC DEPOSITS - For Better Yields Â
PUBLIC PROVIDENT FUNDÂ Â Â NSC/KVPÂ Â Â BANK DEPOSITSÂ Â CORPORATE DEPOSITS Â CORPORATE BONDSÂ
FOR NEWS ON INTEREST RATE CHANGES Â , CLICK HEREÂ Â Â
FOR LATESTÂ Â BANK DEPOSITÂ INTEREST RATES , CLICK HEREÂ
FOR LATESTÂ Â BANK DEPOSITÂ INTEREST RATES , CLICK HEREÂ
 FOR INTEREST RATES ON ALL SMALL SAVINGS ACCOUNTS    , CLICK HERE   Â
​FOR INCOME TAX NEWS , CLICK HERE        FOR BANKING NEWS  CLICK HERE   FOR NEWS ON IPO , NCD ETC  , CLICK HEREÂ
​
​FOR INCOME TAX NEWS , CLICK HERE        FOR BANKING NEWS  CLICK HERE   FOR NEWS ON IPO , NCD ETC  , CLICK HEREÂ
​
NBFC DEPOSITS IN INDIA
What NBFC stands for ? Meaning of NBFC
NBFC TYPES
Non-banking financial institutions (NBFIs), engaged in varied financial activities are part of the Indian financial system providing a range of financial services. NBFCs are incorporated under the Companies Act, 1956. NBFCs can be classified into two broad categories, viz.,
(i) NBFCs accepting public deposit (NBFCs-D) and
(ii) NBFCs not accepting/holding public deposit (NBFCs-ND).
Residuary Non-Banking Companies(RNBCs) are another category of NBFCs whose principal business is acceptance of deposits and investing in approved securities. In the interest of depositors,  NBFC s  are regulated by RBI  . RBI has evolved a regulatory framework the salient features of which are outlined below for the guidance of depositors.. However, the investors must carefully evaluate their investment decisions while investing in NBFCs .Â
(i) NBFCs accepting public deposit (NBFCs-D) and
(ii) NBFCs not accepting/holding public deposit (NBFCs-ND).
Residuary Non-Banking Companies(RNBCs) are another category of NBFCs whose principal business is acceptance of deposits and investing in approved securities. In the interest of depositors,  NBFC s  are regulated by RBI  . RBI has evolved a regulatory framework the salient features of which are outlined below for the guidance of depositors.. However, the investors must carefully evaluate their investment decisions while investing in NBFCs .Â
Rules governing NBFC
- NBFCs include a loan company, an investment company, asset finance company ( i.e. a company conducting the business of equipment leasing or hire purchase finance) and Residuary Non-Banking Companies.
- An NBFC must be registered with the Reserve Bank of India (RBI) and have specific authorization to accept deposits from the public.
- NBFC must display the Certificate of Registration or a certified copy thereof at the Registered office and other offices/branches.
- Registration of an NBFC with the RBI merely authorizes it to conduct the business of NBFC. 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.
- The NBFC whose application for grant of Certificate of Registration (CoR) has been rejected or cancelled by the RBI is neither authorized to accept fresh deposits nor renew existing deposit. Such rejection or cancellation is also published in newspapers from time to time . Besides, a list of NBFCs permitted to accept public deposits, NBFCs whose applications for CoR has been rejected or whose CoR has been cancelled by the RBI is available on the RBI's web site www.rbi.org.in( go to site map and then NBFC list)
- NBFCs which accept deposits should have minimum investment grade credit rating granted by an approved credit rating agency for deposit collection, except certain Asset Finance (equipment leasing and hire purchase finance) companies and Residuary Non-Banking Companies (RNBCs), . The following Credit Rating Agencies have been approved to issue the ratings to NBFCs .Â
Name of the agency                                                     Minimum Investment Grade Credit Rating
(a) The Credit Rating Information Services of India Ltd.                      (CRISIL)FA- (FA Minus)
(b) ICRA Ltd.                                                           MA- (MA Minus)
(c) Credit Analysis & Research Ltd. (CARE)                                 CARE BBB (FD)
(d) Fitch Ratings India Private Ltd.                                        tA-(ind)(FD)
(e) Brickwork Ratings India Pvt. Ltd. (Brickwork)Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â BWR FBBB
(f) Acuite Ratings & Research Limited                                      ACUITE A
(g) Infomerics Valuation and Rating Private Limited (IVRPL)Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â IVR BBB
 What are the restrictions for NBFCs and RNBCs ?Â
NBFCs excluding RNBCs cannot
-Offer a rate of interest on deposits more than that approved by RBI from time to time (at present 12.5%).
-Accept deposit for a period less than 12 months and more than 60 months Â
-Offer any gifts/incentives to solicit deposits from public.
RNBCs should
-offer a rate of interest of not less than 5% per annum on term deposits and 3.5% on daily deposits, both compounded annually, under extant directions.
-RNBCs cannot accept deposits for a period less than 12 months and more than 84 months.
-RNBCs cannot offer any gifts/incentives to solicit deposits from public Â
Refer : RBI Master Direction updated as of 22.02.20219Â
NBFCs excluding RNBCs cannot
-Offer a rate of interest on deposits more than that approved by RBI from time to time (at present 12.5%).
-Accept deposit for a period less than 12 months and more than 60 months Â
-Offer any gifts/incentives to solicit deposits from public.
RNBCs should
-offer a rate of interest of not less than 5% per annum on term deposits and 3.5% on daily deposits, both compounded annually, under extant directions.
-RNBCs cannot accept deposits for a period less than 12 months and more than 84 months.
-RNBCs cannot offer any gifts/incentives to solicit deposits from public Â
Refer : RBI Master Direction updated as of 22.02.20219Â
Deposit receipt of NBFCs
- NBFCs including RNBCs can accept deposit only against issue of proper receipt. The receipt should bear the name of the company and should be signed by an authorized official of the company.   The receipt should mention the name of the depositor, the amount in words as well as figures, the rate of interest payable on the deposit amount and the date of repayment of matured deposit along with the maturity amount.
- In the case of brokers/agents etc collecting public deposits on behalf of NBFCs, the depositors should satisfy themselves that the brokers/agents are duly authorized by the NBFC.
- If a deposit taking NBFC fails to repay the deposit or the interest accrued thereon in accordance with the terms and conditions of acceptance of such deposit, redressal of grievance can be through the Regional Bench of the Company Law Board at Chennai/Delhi/Kolkata/Mumbai
NBFC EXAMPLES - LEADING NBFCs IN INDIA
LIST OF NBFC IN INDIA AUTHORIZED TO TAKE PUBLIC DEPOSITS
As on 31st, January 2022 , RBI has issued permission ​to 49 NBFC companies to  accept Public Deposits  . You may go through the list ,by CLICKING here ,  to know whether the company in which  you want to deposit  is in the lit or not .Â
 Some of the active and  leading NBFC who take public deposits are  :Â
1. Shriram Transport Finance Corporation LimitedÂ
2. Sundaram Finance Limited
3. Bajaj Finance LimitedÂ
4. Mahindra & Mahindra Financial Services LimitedÂ
5. Muthoot Finance LimitedÂ
 Some of the active and  leading NBFC who take public deposits are  :Â
1. Shriram Transport Finance Corporation LimitedÂ
2. Sundaram Finance Limited
3. Bajaj Finance LimitedÂ
4. Mahindra & Mahindra Financial Services LimitedÂ
5. Muthoot Finance LimitedÂ
How do you know whether an NBFC accepting deposit is genuine or not?
​  Verify whether the name of NBFC appears in the list of deposit taking NBFCs entitled    to accept deposits, available at https://rbi.org.in and to ensure that it is not appearing   in the list of companies prohibited from accepting deposits.
➢ NBFCs must prominently display the Certificate of Registration (CoR) issued by the  Reserve Bank on its site / in its office. This certificate should also reflect that the NBFC  has been specifically authorised by RBI to accept deposits. Scrutinize the certificate to
ensure that the NBFC is authorised to accept deposits.
➢ NBFCs cannot accept deposits for a period less than 12-months and more than 60  months and the maximum interest rate that an NBFC can pay to a depositor should    not exceed 12.5%.
➢ The Reserve Bank publishes the change in the interest rates on https://rbi.org.in →  Sitemap → NBFC List → FAQs. Â
 ( Extracted from the RBI Booklet  BE(A)WARE – A Booklet on Modus Operandi of Financial Frauds )
➢ NBFCs must prominently display the Certificate of Registration (CoR) issued by the  Reserve Bank on its site / in its office. This certificate should also reflect that the NBFC  has been specifically authorised by RBI to accept deposits. Scrutinize the certificate to
ensure that the NBFC is authorised to accept deposits.
➢ NBFCs cannot accept deposits for a period less than 12-months and more than 60  months and the maximum interest rate that an NBFC can pay to a depositor should    not exceed 12.5%.
➢ The Reserve Bank publishes the change in the interest rates on https://rbi.org.in →  Sitemap → NBFC List → FAQs. Â
 ( Extracted from the RBI Booklet  BE(A)WARE – A Booklet on Modus Operandi of Financial Frauds )
LATEST INTEREST RATES OF LEADING NBFC
​ To know the interest rates offered by Banks , CLICK HERE .Â
To know the interest rates offered by Post Offices  , CLICK HERE .Â
To know the interest rates offered by Post Offices  , CLICK HERE .Â
 NBFCs also hike FD Rates :
- ​Dated 24.11.2023 :  . Below rates  are  currently being offered by select NBFCsÂ
NBFCÂ |
Interest Rate -12 months pa |
Interest Rate -60 months pa |
7.80Â % YEARLY RESTSÂ ( Senior Citizens 8.30 %Â Â ) |
8.60% YEARLY RESTS ( Senior Citizens 9.10 %  ) ​sENIOR CITIZENS WOMEN - 9.20 % pa |
|
7.45  % YEARLY RESTS ( Senior Citizens 7.95 %  ) |
Max 36 months : ​7.75  %  YEARLY RESTS ( Senior Citizens 8.25 %  ) |
|
7.40 % YEARLY RESTS ( Senior Citizens 7.65 % ) |
8.05 % YEARLY RESTS ( Senior Citizens 8.30 % ) |
|
7.60 % YEARLY RESTS ( Senior Citizens  7.85  %  ) |
9.45Â % YEARLY RESTSÂ ( Senior Citizens 9.70Â %Â Â ) |
|
7.45%Â YEARLY RESTSÂ |
7.50 % YEARLY RESTSÂ |
|
- |
7.75 % ( Senior Citizens  8.25  %  ) |
Precautions while placing deposits with NBFC
 ​Precautions to be taken by depositors
➢ When depositing money, insist on a proper receipt for each and every deposit made
with the bank / NBFC / company.
➢ The receipt should be duly signed by an officer authorised by the company and should
state, inter alia, the date of the deposit, the name of the depositor, the amount in words
and figures, rate of interest payable, maturity date and amount.
➢ In the case of brokers / agents, etc., collecting public deposits on behalf of NBFCs,
verify that the brokers / agents are duly authorised for the purpose by the concerned
NBFC.
➢ Remember that the Deposit Insurance facility from DICGC  is not available to depositors of NBFCs.Â
➢ When depositing money, insist on a proper receipt for each and every deposit made
with the bank / NBFC / company.
➢ The receipt should be duly signed by an officer authorised by the company and should
state, inter alia, the date of the deposit, the name of the depositor, the amount in words
and figures, rate of interest payable, maturity date and amount.
➢ In the case of brokers / agents, etc., collecting public deposits on behalf of NBFCs,
verify that the brokers / agents are duly authorised for the purpose by the concerned
NBFC.
➢ Remember that the Deposit Insurance facility from DICGC  is not available to depositors of NBFCs.Â
Are NBFC Deposits Safe ?
 NBFCs are regulated by Reserve Bank of India  and has put various conditions  to be followed for accepting public deposits .  RBI does not guarantee the repayment of deposits accepted by NBFCs , even though it has stipulated various condition for doing business by them . Further NBFC deposits do not carry DICGC guarantee , which is issued to Bank deposits . Hence one has to understand  the risks involved in placing deposits with NBFCs  and take extra precautions  before investing in them .   Â
NEW ARTICLE PUBLISHEDÂ
         TAX PLANNING FOR FY 2023-24 ( AY 2024-25 )Â
Comprehensive  Article on Income tax changes in Rules, Rates , Slabs , Rebates  and EstimationÂ
CLICK HERE TO READÂ
​
         TAX PLANNING FOR FY 2023-24 ( AY 2024-25 )Â
Comprehensive  Article on Income tax changes in Rules, Rates , Slabs , Rebates  and EstimationÂ
CLICK HERE TO READÂ
​
FOR READING ARTICLE  TAX ON RETIREMENT BENEFITS , CLICK HEREÂ
PRECAUTIONS TO BE TAKEN WHILE INVESTING STOCK MARKETS , CLICK HEREÂ
FINANCIAL PLANNING FOR YOUNG  , CLICK HERE ​   HOW TO LINK AADHAR WITH PAN ?  CLICK HERE ​   Â
Compare Fixed Deposit Interest rates offered by various banks before investing Â
                      VISIT :   LATEST BANK DEPOSIT INTEREST RATES - A  COMPARISONÂ
PRECAUTIONS TO BE TAKEN WHILE INVESTING STOCK MARKETS , CLICK HEREÂ
FINANCIAL PLANNING FOR YOUNG  , CLICK HERE ​   HOW TO LINK AADHAR WITH PAN ?  CLICK HERE ​   Â
Compare Fixed Deposit Interest rates offered by various banks before investing Â
                      VISIT :   LATEST BANK DEPOSIT INTEREST RATES - A  COMPARISONÂ
HAPPY TO Â RECORD Â
www.plannprogress.com has crossed
                            500,000   PAGE VIEWS Â
THANK ALL READERS , WELL WISHERS Â WHO HAVE HELPED US TO REACH Â THE MILESTONEÂ
TO KNOW  ABOUT  TAX ON RETIREMENT BENEFITS  , CLICK HEREÂ
​
www.plannprogress.com has crossed
                            500,000   PAGE VIEWS Â
THANK ALL READERS , WELL WISHERS Â WHO HAVE HELPED US TO REACH Â THE MILESTONEÂ
TO KNOW  ABOUT  TAX ON RETIREMENT BENEFITS  , CLICK HEREÂ
​
DISCLAIMER
We are not SEBI  registered advisor and the the articles contained in the website , including this page , is not an investment advice .  In case if you are interested in Investing , you  may contact your Financial Advisor for  the same . We  cannot be held for any loss arising out  of your investment  made as per the article . ​