NBFC depositors can prematurely withdraw full amount within 3 months: RBI
Mumbai: The Reserve Bank on Monday said non-banking financial companies (NBFCs) will pay 100 per cent of deposit amount within the first three months of accepting the fund, if the depositor seeks an withdrawal citing an emergency.
In its review of regulations governing NBFCs, the central bank said no interest will be paid for such premature withdrawals and added that these changes will be in force from January 1, 2025.
The definition of “critical illness” set by insurance regulator Irdai will guide on whether a request qualifies under the category, the central bank said.
“...in cases of critical illness, hundred per cent of the amount of the principal sum of deposit may be prematurely paid to individual depositors at the request of the depositors, before the expiry of three months from the date of acceptance of such deposits, without interest,” the central bank said.
It specified expenses of an emergent nature include a medical emergency or expenses due to natural calamities or a disaster as notified by the government, it said.
If the money is not sought for an emergency and a premature withdrawal is sought within three months, NBFCs can pay up to 50 per cent of the deposit without paying any interest.
However, not more than 50 per cent of the amount of the principal sum of deposit or Rs 5 lakh, whichever is lower, may be prematurely paid, it added.
The RBI has also asked NBFCs to intimate depositors about a maturity 14 days ahead as against the present regulations stipulating it at two months.