Working on definition of deposits for financial entities: RBI deputy

This, after concerns emerge over unauthorised deposit taking

Reserve Bank of India Deputy Governor R Gandhi said on Monday that the central bank is working with the finance ministry on the definition of deposits for financial entities beyond banks and non-bank finance companies.

A recent spate of regulatory action on small entities, loosely known as chit funds, collecting deposits has raised concerns over unauthorised deposit taking.

"We have to define in such a way that who will be the regulator for different types of collection of money," Gandhi said on the sidelines of a meeting with state finance secretaries. 

"Today, certain things are clear, certain things are unclear. In the unclear area, we are trying to bring more clarity."

Gandhi also said the RBI was examining the feedback on a recent circular where it asked non-bank finance companies to accept only a certain category of shares known as Group 1 shares as collateral for loans above Rs 500,000.