NBFCs to ensure full cover on public deposits

By Our Banking Bureau | 08 Feb 2005

1

Mumbai: The Reserve Bank of India (RBI) has said that non-banking finance companies (NBFCs) should ensure at all times that there is full cover available for the public deposits accepted by them.

In a notification to all NBFCs yesterday, the central bank said that while calculating the cover, the value of all debentures (secured and unsecured) and outside liabilities other than aggregate liabilities to depositors may be deducted from the total assets.

The assets should be evaluated at book value or realisable market value whichever is lower for this purpose, the RBI has said.

NBFCs concerned must inform the regional office of the RBI in case the asset cover calculated falls short of the liability on account of public deposits.

All NBFCs accepting or holding public deposits are directed to create a floating charge on the statutory liquid assets invested in terms of Section 45-IB of the RBI Act, 1934, in favour of their depositors.

Such charge should be duly registered in accordance with the requirements of the Companies Act, 1956, the RBI has said.

Business History Videos

History of hovercraft Part 3...

Today I shall talk a bit more about the military plans for ...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of hovercraft Part 2...

In this episode of our history of hovercraft, we shall exam...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Hovercraft Part 1...

If you’ve been a James Bond movie fan, you may recall seein...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Trams in India | ...

The video I am presenting to you is based on a script writt...

By Aniket Gupta | Presenter: Sheetal Gaikwad

view more