Fintotal News Analysis | Mannapuram Finance Barred from Raising Public Deposits
Mannapuram Finance Barred from Raising Public Deposits
Ruby Jacob, 07 Feb 2012

The RBI has clamped down on Mannapuram Finance and Mannapuram Agro Farms for accepting deposits from the public. Indias largest loan-against-gold lender has been barred from accepting new deposits and renewing maturing deposits. Deposit taking NBFCs have to comply with various prudential norms laid down by the RBI whereas the non-deposit taking NBFCs are spared from doing so.

Mannapuram Finance, which was licensed by RBI to function as a non-deposit taking NBFC in March 2011, used to be a deposit-taking company prior to that. However it continued to accept deposits from the public in its branches and in Mannapuram Agro Farms (MAGRO) to supplement their funding needs. Receipts were being issued by MAGRO.

RBI in its statement said that acceptance of deposits either by Mannapuram Finance or Mannapuram Agro Farms would be an offence punishable with imprisonment. It added that persons who make deposits should do so at their own risk.

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