BANKING AFFAIRS

Detailed explanation-1: -Which entities can legally accept deposits from public? Banks, including co-operative banks, can accept deposits. Non-bank finance companies, which have been issued Certificate of Registration by RBI with a specific licence to accept deposits, are entitled to accept public deposit.

Detailed explanation-2: -Residuary Non-Banking Company is a class of NBFC which is a company and has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner and not being Investment, Asset Financing, Loan Company.

Detailed explanation-3: -business of a non-banking financial institution are not allowed to accept deposits except from relatives specified and in the manner prescribed in the provision of Section 45-S of the RBI Act. However, such entities are now allowed to access loans from bodies with a corporate identity including NBFCs.

Detailed explanation-4: -Yes. Under the new NBFC Directions, an NBFC can accept ICDs without any ceiling subject, however, to the limit set by Capital Adequacy Norms applicable to it.