Some of the important regulations relating to acceptance of deposits by NBFCs are as under:

i. The NBFCs are allowed to accept/renew public deposits which are repayable after a period of 12 months but not later than 60 months. They cannot accept deposits repayable on demand.

ii. NBFCs cannot offer interest rates higher than the ceiling rate prescribed by the Reserve Bank from time to time. The present ceiling is 12.5 per cent per annum. The interest may be paid or compounded at rests not shorter than monthly rests.

iii. NBFCs should have minimum investment grade credit rating of ‘BBB–‘ from any of the SEBI-registered credit rating agency which shall be obtained at least once in a year.

iv.  The deposits with NBFCs are not insured.

v.  The repayment of deposits by NBFCs is not guaranteed by the Reserve Bank.

vi. Certain mandatory disclosures are to be made about the company in the Application Form issued by the company soliciting deposits.

A. Earning Value :	Average Profit after tax (net of
	dividend on preference shares
	and extra ordinary items ) for
	the last three years		Capitalisation
		X	factor
	Number of equity shares

Hypothetically, the profit after tax for the last three	}	Rs. 100.00 lakhs,
financial years net of dividend on preference shares }		Rs. 120.00 lakhs
and net of extra ordinary items	} &	Rs. 140.00 lakhs
No. of equity shares of the company		10,00,000 shares
The investee company is a predominantly manufacturing
company and the capitalisation factor would be		: 8 per cent
The earning value will be worked out as under :

(100.00+120.00+140.00)		100
	X	---	= Rs.150/-
3 X 10,00,000		8

Yes, loss making banks can make donations upto Rs.5 lakhs only in a financial year.

You can reach us in three ways:

1. Toll free phone number: 1800 267 7955 (between 9 am to 7 pm on any working day).

2. E-mail id: support@rbiretaildirect.org.in

3. Raise a request on the Retail Direct portal.

For additional details on using the Retail Direct portal, you may refer to the User Manual in the Help section of the Retail Direct Portal.

A depositor wanting to place deposit with an NBFC must take the following precautions before placing deposits:

i.  That the NBFC is registered with the Reserve Bank and specifically authorized by the Reserve Bank to accept deposits. The list of deposit taking NBFCs entitled to accept deposits is available on the web site of the Reserve Bank of India (www.rbi.org.in) under ‘Regulation → Non-Banking’. The depositor should check the above list to know about NBFCs permitted to accept public deposits therein.

ii.  NBFCs have to prominently display the Certificate of Registration (CoR) issued by the Reserve Bank at place of business. This CoR should also reflect that the NBFC has been specifically authorized by the Reserve Bank to accept deposits. Depositors must scrutinize the CoR to ensure that the NBFC is authorized to accept deposits.

iii. The maximum interest rate that an NBFC can pay to a depositor should not exceed 12.5% currently. The Reserve Bank keeps altering the interest rates depending on the macro-economic environment and publishes the change in the interest rates on its website (www.rbi.org.in) under ‘notifications’.

iv. The depositor must insist on a proper receipt for every amount of deposit placed with the NBFC. The receipt should be duly signed by an officer authorized by the NBFC and should state the date of the deposit, the name of the depositor, the amount in words and figures, rate of interest payable, maturity date and amount.

v. 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.

vi. The depositor must bear in mind that public deposits are unsecured and Deposit Insurance facility is not available to depositors of NBFCs.

vii. The Reserve Bank of India does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the NBFC.

The One Rupee notes issued under the Coinage Act, 2011 are legal tender and included in the expression Rupee coin for all the purposes of the Reserve Bank of India Act, 1934. Since the rupee coins issued by Government constitute the liabilities of the Government, one rupee Note is also liability of the Government of India.

1. The Prudential Norms have prescribed that the unquoted shares should be valued at break up value. However, an NBFC can also value these shares at fair value, if it so desires.

Break up value and fair value are to be calculated as per the formula given in the Directions. The formula is illustrated as under :

If the paid equity capital of the company is = Rs. 1,00,00,000

The free reserves net of intangible assets

and deferred revenue expenditure = Rs. 3,20,00,000

Number of equity shares = 10,00,000 shares

The break up value will be :	1,00,00,000 + 3,20,00,000	= Rs. 42/-
	10,00,000

If we take the earning value worked out in the previous question, and since we know that the fair value is the mean of the break up value and the earning value, the fair value will be	150+42	= Rs.96/-
	2

In the given case, the company may value its shares at fair value viz, Rs.96/- which is higher than the break up value at Rs.42/- or cost, whichever is lower.

Yes, the overseas branches of the banks can make donations abroad, provided the banks do not exceed the prescribed ceiling of one per cent of their published profit of the previous year.

No. The Reserve Bank does not guarantee repayment of deposits by NBFCs even though they may be authorized to collect deposits. As such, depositors should take informed decisions while placing deposits with an NBFC.

Yes. Different designs of ₹10 coins are currently in circulation. All coins of ₹10 denomination minted from time to time by the Government of India (with/without the Rupee symbol) are legal tender. For more details kindly see our Press Release issued in this regard which is available at the following link www.rbi.org.in>>Issuer of currency>>Press Release>>January 17, 2018. https://website.rbi.org.in/en/web/rbi/-/press-releases/rbi-reiterates-legal-tender-status-of-%E2%82%B9-10-coins-of-different-designs-42887.