Recorded RBI impact
Directive prohibition
Directive prohibition · Fresh imposition
Published by RBI
6 Feb 2012
Case Brief
RBI said Manappuram Finance Limited, Thrissur, Kerala, is not permitted under the RBI Act, 1934 to accept or renew deposits from the public. The company had earlier been a deposit-taking NBFC but became a non-deposit-taking NBFC from March 22, 2011, so any fresh acceptance or renewal of matured deposits would violate its certificate of registration and RBI directions. RBI further observed that deposits were being taken through Manappuram Agro Farms (MAGRO) and that, under Section 45-S of the RBI Act, such acceptance of deposits by MAGRO is also prohibited. The press release warns the public that any deposits placed with Manappuram Finance Limited or MAGRO are at the depositor’s own risk.
Why RBI Acted
RBI stated that Manappuram Finance Limited, Thrissur (earlier Manappuram General Finance and Leasing Ltd.), was a registered deposit-taking NBFC but became a non-deposit-taking NBFC effective March 22, 2011. Acceptance of deposits from the public, including renewal of matured deposits, therefore contravened the terms and conditions of its certificate of registration and RBI directions under the RBI Act, 1934. RBI also noted that the company had been accepting deposits in branches/offices and issuing deposit receipts in the name of Manappuram Agro Farms (MAGRO), a sole proprietary concern of the Executive Chairman; under Section 45-S of the RBI Act, acceptance of deposits by MAGRO, an unincorporated body, is also prohibited.
Operating Impact
Manappuram Finance Limited must not accept or renew public deposits, and any such activity would expose the company and related concern MAGRO to legal consequences under the RBI Act. Depositors are warned that money placed with either entity is at their own risk. The notice is effective immediately as a regulatory prohibition; no deposit-taking activity should continue through branches, offices, or through MAGRO receipts.
Regulatory Basis
- Reserve Bank of India Act, 1934
- Section 45-S of the RBI Act
Action Facts
- Primary Impact
- Directive prohibition
- Effective From
- 22 Mar 2011
- Entities Affected
- 2
- Entity Role
- Bulk Member
- Entity Type
- NBFC
Related Entities
Entities similar to Manappuram Agro Farms (MAGRO)