RBI asks Manappuram Finance not to accept public deposits

Manappuram Finance Ltd, which provides loans using gold as collateral, is not allowed to accept or renew deposits from the public, the Reserve Bank of India said, noting the firm gave up its licence to take deposits in March 2011.

The RBI said on its website that Manappuram Finance had been accepting deposits from the public and had been issuing deposit receipts in the name of MAGRO, a sole proprietary concern of Shri V P Nandakumar, who is Manappuram's executive chairman.

Manappuram said the notice was the result of a technical error and that it had not accepted deposits since converting to a non-deposit-taking, non-banking financial company.

"There is some balance. While repaying that, they have found out some mistake, some technical error," I Unnikrishnan, the firm's managing director, told Reuters.