Notifications

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RNBCs – Payment of Interest for Delayed Repayment of Deposits

RBI / 2007-2008/211
DNBS (PD) CC. No.110 / 04.18.001 / 2007- 08

December 14, 2007

To,

Residuary Non-Banking Companies

Dear Sirs,

Residuary Non-Banking Companies (Reserve Bank) Directions, 1987 –
Payment of interest for delayed repayment of deposits

Please refer to the Residuary Non-Banking Companies (Reserve Bank) Directions, 1987. In terms of paragraph 5A of the said directions, it is obligatory on the part of the Residuary Non-Banking Companies (RNBCs) to intimate about the maturity of the deposit to the depositor at least two months before the date of maturity of the deposit.

2. It has now been decided that, in the interest of the depositors, where an RNBC fails to repay the deposit along with interest on maturity on the claim made by the depositor, it shall be liable to pay interest in the following manner.

i. If the company has intimated about the maturity to the depositor at least two months before the date of maturity and has sufficient evidence for the same viz. acknowledgement from the depositor, but the depositor fails to submit his claim on maturity, then the company will be required to pay interest at the rate as applicable to the deposit from the date of claim till the date of repayment along with the amount due on maturity.

ii. If the company has not intimated about the maturity to the depositor two months before the date of maturity, then, as and when the depositor makes a claim, the company will be required to pay interest at the rate as applicable to the deposit from the date of maturity till the date of repayment along with the amount due on maturity.

Accordingly, the Residuary Non-Banking Companies (Reserve Bank) Directions, 1987 have been amended.

3. A copy each of the amending Notification No. DNBS. 198/ CGM (PK)–2007 dated December 14, 2007 as well as updated Notification No.DFC.55/ DG(O)-87 dated May 15, 1987 are enclosed for your information.

Yours faithfully,

(P. Krishnamurthy)
Chief General Manager-in-Charge


RESERVE BANK OF INDIA
DEPARTMENT OF NON-BANKING SUPERVISION
CENTRAL OFFICE
CENTRE I, WORLD TRADE CENTRE,
CUFFE PARADE, COLABA,
MUMBAI 400 005
.


Notification No. DNBS.198 / CGM (PK)-2007 dated December 14, 2007

The Reserve Bank of India, having considered it necessary in the public interest and being satisfied that for the purpose of enabling the Bank to regulate the financial system of the country to its advantage it is necessary to amend the Residuary Non-Banking Companies (Reserve Bank) Directions, 1987, in exercise of the powers conferred by Sections 45J, 45JA, 45K and 45L of the Reserve Bank of India Act, 1934 (2 of 1934) and of all the powers enabling it in this behalf, hereby directs that the directions contained in Notification No.DFC.55/DG(O)-87 dated May 15, 1987 shall stand amended with immediate effect as follows:

After paragraph 5A, the following paragraph shall be inserted, namely;

"Payment of interest for delayed repayment of public deposits
5AA. Where an RNBC fails to repay the deposit along with interest on maturity on the claim made by the depositor, it shall be liable to pay interest in the following manner:

i. if the company has intimated about the maturity to the depositor at least two months before the date of maturity and has sufficient evidence for the same viz. acknowledgement from the depositor, but the depositor fails to submit his claim on maturity, then the company will be required to pay interest at the rate as applicable to the deposit from the date of claim till the date of repayment along with the amount due on maturity.

ii. if the company has not intimated about the maturity to the depositor two months before the date of maturity, then, as and when the depositor makes a claim, the company will be required to pay interest at the rate as applicable to the deposit from the date of maturity till the date of repayment along with the amount due on maturity."

(P. Krishnamurthy)
Chief General Manager-in-Charge


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