Acceptance of Public Deposits by NBFC's Ceiling and Interest

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There is ceiling on acceptance of public deposits. An NBFC maintaining required NOF (Net Owned Fund) /CRAR (capital-to-risk-assets ratio) and complying with the prudential norms can accept public deposits as follows:

* Category of NBFC
* Ceiling on public deposits
* AFCs maintaining CRAR of 15% without credit rating
* AFCs with CRAR of 12% and having minimum investment grade credit rating 1.5 times of NOF or Rs 10 crore whichever is less
* 4 times of NOF
* LC/IC with CRAR of 15% and having minimum investment grade credit rating 1.5 times of NOF

Presently, the maximum rate of interest a NBFC can offer is 11%. The interest may be paid or compounded at rests not shorter than monthly rests.

The NBFCs are allowed to accept/renew public deposits for a minimum period of 12 months and maximum period of 60 months. They cannot accept deposits repayable on demand.