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UES 35. We understand that there is no ceiling on raising of deposits by RNBCs, then how safe is deposit with them?

April 26, 2017ceiling deposit deposits raising rnbcs safe ues understand

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UES 35. We understand that there is no ceiling on raising of deposits by RNBCs, then how safe is deposit with them?

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ANS 35. It is true that there is no ceiling on raising of deposits by RNBCs but every RNBC has to ensure that the amounts deposited and investments made by the company are not less that the aggregate amount of liabilities to the depositors. To secure the interest of depositor, such companies are required to invest in a portfolio comprising of highly liquid and secured instruments viz. Central/State Government securities, fixed deposit of scheduled commercial banks (SCB), Certificate of deposits of SCB/FIs, units of Mutual Funds, etc.