Reserve Bank of India will soon define what constitutes deposits for financial entities other than banks and NBFC companies. Deputy governor R. Gandhi said RBI wants to have a definition in such a way that who will be the regulator for different types of collection of money. The central bank is concerned over the recent action taken against small companies, described as chit funds, which have been collecting deposits unauthrisedly. 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. He said that in case of banks, the definition of a deposit is very clear, but it does not cover money collected by other entities for which the exercise is being carried out. He added that amendments will have to be made in the laws once the redefinition gets done.
