Manappuram says no public deposit taken since March 2011

Manappuram Finance on Monday said it had not accepted any deposits from the public since March last year and it would take necessary measures to address concerns raised by the Reserve Bank of India (RBI) in this regard.

Its board of directors met on Friday. “The boardnoted the company has not accepted any deposits from the public since March 22, 2011, in compliance with its status as a non-deposit accepting the non-banking finance company. The board directed the company to take all necessary measures to fully address the concerns raised by the RBI,” the statement said.

Adding: “The company will take immediate steps to completely ring fence its operations from the operations of other entities owned or controlled by V P Nandakumar (executive chairman) and his family to ensure that there is no overlapping of assets, branches or personnel between the companies.”

RBI had, last week, cautioned Manappuram Finance against accepting public deposits as the firm had converted itself into a non-deposit taking NBFC.

In a release issued on its website, the apex bank had said, “It has come to the notice of the RBI that Manappuram Finance has been accepting deposits from the public in its branches and offices and issuing deposit receipts in the name of Manappuram Agro Farms (Magro), a sole proprietary concern of V P Nandakumar”.

It had added that acceptance of deposits either by Manappuram Finance or by group company Magro was punishable with imprisonment.

Manappuram Finance was earlier registered with the RBI as a deposit-taking NBFC. However, in March, 2011, it became a non-deposit taking NBFC.

In Monday’s statement, the NBFC further said its board had decided to constitute an independent committee under the chairmanship of former RBI deputy governor Jagdish Capoor to review all aspects of operations, systems, controls and organisation structure, including composition of the board of Manappuram Finance.