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|Sr. No.||Category||Regulator||Additional Comments|
|1||Commercial and Cooperative Banks||Reserve Bank of India (RBI)||All Commercial and Co-operative Banks are entitled to accept deposits|
|2||Non-Banking Finance Companies (NBFCs)||RBI||Only few NBFCs are authorised to accept deposit upto a certain limit (Click here to view the complete list)|
|3||Housing Finance Companies (HFCs)||National Housing Bank (NHB)||Only few HFCs are permitted to accept deposits(Click here to view the complete list)|
|4||Other Companies||Ministry of Corporate Affairs (MCA)||Only eligible companies are allowed to accept deposits under Companies (Acceptance of Deposit) Rules, 2014 upto a certain limit (Click here to view the list of the companies which have filed advertisements with the MCA for accepting deposits)|
|5||Cooperative Credit Societies||Registrar of Cooperative Societies (RCS)||Can only accept deposits from their voting members|
|6||Multi State Cooperative Societies||Central Registrar of Cooperative Societies||Can only accept deposits from their voting members|
Money circulation or Ponzi schemes are schemes promising easy or quick money upon enrolment of members. Income under pyramid structured schemes do not come as much from the sale of products, as they are primarily linked with enrolling more and more members from whom hefty subscription fees are taken. It is incumbent upon all members to enrol more members, and a portion of the subscription amounts so collected is distributed among the members at the top of the pyramid. Any break in the chain leads to the collapse of the pyramid, and the members lower in the pyramid are the ones that are affected the most.
Ponzi schemes are those schemes that collect money from the public on promises of high returns. As there is no asset creation, money collected from one depositor is paid as returns to the other. Since there is no other activity generating returns, the scheme becomes unviable and impossible for the people running the scheme to meet the promised return or even return the principal amounts collected after a certain size. Such schemes inevitably fail and the perpetrators disappear with the money.
No. Acceptance of money under Money Circulation / Pyramid structured schemes and Ponzi schemes is not allowed as acceptance of money under any scheme is a cognizable offence under the Prize Chit and Money Circulation (Banning) Act, 1978 and are hence banned. Collecting money under such schemes are prohibited under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978. The Act prohibits any person or individual to promote or conduct any prize chit or money circulation scheme or enrol as member to its schemes or anyone to participate in it by either receiving or remitting any money in pursuance of such chit or scheme.
The concerned State Governments are responsible for initiating action for violation of the provisions of this Act
NBFCs lend and make investments and hence their activities are akin to that of banks; however there are a few differences as given below:
1. Only select, specifically authorised NBFCs can accept deposits.
2. NBFC cannot accept demand deposits;
3. NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself;
4. Deposits in the Bank are insured by Deposit Insurance and Credit Guarantee Corporation under its deposit insurance facility. However, the same facility is not available to deposits with NBFCs.
5. NBFCs cannot accept deposit and offer interest beyond the limit prescribed by RBI.
A depositor wanting to place deposit with an NBFC must take the following precautions before placing deposits:
1. To ensure that the NBFC is registered with RBI and specifically authorized by the RBI to accept deposits. A list of deposit taking NBFCs entitled to accept deposits is available at www.rbi.org.in → Sitemap → NBFC List. The depositor should check the list of NBFCs permitted to accept public deposits and also check that it is not appearing in the list of companies prohibited from accepting deposits, which is available at www.rbi.org.in → Sitemap → NBFC List → NBFCs who have been issued prohibitory orders, winding up petitions filed and legal cases under Chapter IIIB, IIIC and others.
2. NBFCs have displayed the Certificate of Registration (CoR) issued by Reserve Bank of India on its prominent place. This certificate should also reflect that the NBFC has been specifically authorized by RBI to accept deposits. Depositors must scrutinize the certificate to ensure that the NBFC is authorized to accept deposits.
3. The maximum interest rate that an NBFC can pay to a depositor should not exceed 12.5%.
4. The depositor must insist on a proper receipt for every amount of deposit placed with the company. The receipt should be duly signed by an officer authorized by the company 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.
5. 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.
6. The depositor must bear in mind that public deposits are unsecured and Deposit Insurance facility is not available to depositors of NBFCs.
7. 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 company.