RBI bars MMLF from accepting deposits for 6 months

The Reserve Bank of India (RBI) today barred non-banking financial company Money Masters Leasing & Finance (MMLF) from accepting public deposits and selling its assets for six months for violation of directions on deposit acceptance.

"The RBI has prohibited with immediate effect Money Masters Leasing & Finance from accepting public deposits from any person in any form whether by way of fresh deposits or renewal of the deposits or otherwise as well as from selling, transferring, creating charge or mortgage or deal in any manner with its property and assets...," the apex bank said in a statement.

The RBI said that the NBCF has been barred from undertaking such operations without prior permission of the RBI for a period of six months.

"It was observed during inspection of the books of account of MMLF with reference to its financial position as on March 31, 2010, that the company has violated extant directions on the deposit acceptance," the statement said.

Besides, the city-based MMLF has been directed to repay existing deposits as and when they mature.

It, however, has been allowed to carry on other business activities in accordance with law.

The company, which specialises in hire-purchase and leasing, is also engaged in consumer finance and public vehicle finance. The firm had secured NBFC registration in 1998.