RBI cautions public

CHANDIGARH, Sept 22: The Reserve Bank of India (RBI) has clarified that a non banking financial company can accept deposits from public if it, inter alia complies with the following conditions:
i) If the company was functioning on January 9, 1997, it should have applied for a certificate of registration to Reserve Bank of India under section 45-IA of Reserve Bank of India , 1934 and the application should not have been rejected by the Reserve Bank of India . If the company has started functioning after this date, it has obtained a certificate of registration from Reserve Bank of India,
ii) The non banking financial company must have net owned fund of not less than Rs 25 lakh,
iii) It must have obtained a credit rating from one of the approved credit rating agencies and the rating should not be below the minimum investment grade `A’ or its equivalent in the case of equipment leasing/hire purchase finance companies and `A’ in the case of loan and investment companies and
iv) The rate of interest paid by the non banking financial company must not exceed 16 per cent per annum, which can be compounded at monthly rates. No incentive, other than interest, can be offered by the non banking financial company to the depositors.

According to a statement issued by the UT Administration here, it has come to the notice of Reserve Bank of India that a non banking financial company which do not comply these conditions have been accepting deposits from the public. The public is cautioned that they should be careful in dealing with this company named Endowment Investment (India) Limited, 387, Sector 37 D, Chandigarh.