The Reserve Bank of India today advised  that Manappuram Finance Limited, Thrissur, Kerala (earlier known as Manappuram General Finance and Leasing Ltd.), is not permitted under the Reserve Bank of India Act, 1934, to accept/renew deposits from the public.

The Reserve Bank has stated that acceptance of deposits either by Manappuram Finance Limited or by Manappuram Agro Farms (MAGRO) is punishable with imprisonment and has cautioned members of public that those who deposit money with Manappuram Finance Limited or MAGRO do so at their own risk.

Background

Manappuram Finance Limited, Thrissur, Kerala (earlier known as Manappuram General Finance and Leasing Ltd.), was a company registered with the Reserve Bank of India as a deposit taking Non-Banking Financial Company. However, it became a non-deposit taking non-banking financial company with effect from March 22, 2011. Acceptance of deposits from the public, including renewal of matured deposits by that company, thus, amounts to contravention of the terms and conditions of the certificate of registration currently held by it and the directions issued to the Reserve Bank and thus punishable under the Reserve Bank of India, 1934 (RBI Act).

It has come to the notice of the Reserve Bank that Manappuram Finance Limited has been accepting deposits from the public in its branches and offices has been issuing deposit receipts in the name of Manappuram Agro Farms (MAGRO), a sole proprietary concern of Shri V.P Nandakumar who is the Executive Chairman of the company. It is further observed that in some cases instead of repaying the matured deposits, fixed deposit receipts are being issued in the name of MAGRO. In terms of Section 45-S of the RBI Act, acceptance of deposits from the public by MAGRO, which is an unincorporated body, is also prohibited.

Alpana Killawala
Chief General Manager

Press Release : 2011-2012/1255