Kerala-based Manappuram Finance says a recent Reserve Bank of India (RBI) notification to stop taking deposits has in no way affected its business and and customer confidence. V P Nandakumar, executive chairman of the 1992-founded non-banking financial company (NBFC) headquartered in Valapad off Thrissur, tells George Joseph its expansion plan will go on according to schedule. Edited excerpts:
Has the central bank sought an explanation or clarification from your side (after it learned about Manappuram continuing to accept deposits even after it became a non-deposit taking NBFC from March 22 last year)? What you have done so far?
The RBI has not sought a clarification from us, but it has given us a set of directions to comply with so as to rectify the matter. We have already complied with all those directions, and replied to RBI on this Monday. We will strictly comply with all the directions of RBI.
Is there a response to your communication?
No, I think it will take time. If the regulator is not satisfied with our reply, and asks us to do something more, we are ready to comply with it. In any case, Manappuram Finance had not accepted deposits after March 2011.
Does your board have full faith in you as the company’s chairman? Is there any dissatisfaction or criticism against your style of functioning?
No. My board has full confidence in me. They are working as one team, and are of the view that we have not done anything wrong. We have not committed any mistakes knowingly. Even so, we have constituted a four-member committee comprising our independent members to go into the matter and resolve it.
Did you at any point think of resigning, taking responsibility of the issue?
Why? There is no such big issue in the company. I never thought of resigning. Everything is going on as usual. The company is running smoothly. As for the current issue, we can rectify it and manage the affairs with our expertise and experience in the money business. The issue has not affected the credibility of my company. We have not received a bad remark from any customer. So, why should I resign?
What is the share-holding pattern of Margo (Manappuram Argo Farms?
Margo has nothing to do with Manappuram Finance. Margo is owned 100 per cent only by me. The company will take immediate steps to completely ring-fence its operations from the operations of other entities owned or controlled by me and my family, to ensure that there is no overlapping of assets, branches or personnel between the two. Margo has stopped collecting deposits from this January. There will not be an overlapping of branch network or staff in the future.
As the issue affected the future plans of Manappuram?
No way. Everything is going on as per our plan and schedule. We have a target of 3,000 branches functioning by next month-end — and we are marching towards it. Also, we will have branches in 22 states. Our business expansion plans are also going on with full vigour. After all, gold loan companies are having good business prospects in our country.