What a depositor should know before depositing money with NBFCs

While mak­ing deposits with an NBFC, the fol­low­ing aspects should be borne in mind:

1. A prop­er deposit receipt is issued, giv­ing details such as the name of the depositor/s, the date of deposit, the amount in words and fig­ures, rate of inter­est payable and the date of repay­ment of matured deposit along with the matu­ri­ty amount. Depositor/s should insist on the above and also ensure that the receipt is duly signed and stamped by an offi­cer autho­rised by the com­pa­ny on its behalf.
2. Pub­lic deposits are unsecured.
3. 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.
4. 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.
5. Deposit Insur­ance facil­i­ty is not avail­able to the depos­i­tors of NBFCs.