Manappuram's board to meet on Feb 10 to discuss RBI's letter

Manappuram's board to meet on Feb 10 to discuss RBI's letter

Manappuram Finance today said its board of directors will meet on February 10 to discuss the caution letter issued by the RBI to it for allegedly accepting public deposits in violation of rules.

"The board of directors of Manappuram Finance will meet on February 10, at company headquarters at Valappad in Thrissur, Kerala, to discuss the press release of the RBI," the non-banking financial company said in a filing to the BSE.

It said the meeting will also discuss measures for further improving corporate governance of the company. Manappuram Finance's filing comes a day after the Reserve Bank cautioned it against accepting public deposits as the firm has converted itself into a non-deposit taking NBFC.

The Reserve Bank of India (RBI), in a release issued in its website, had said that it has come across instances of acceptance of deposits by Kerala-based firm.

It had added that acceptance of deposits either by Manappuram Finance or by group company Manappuram Agro Farms (MAGRO) is punishable with imprisonment. RBI had also "cautioned members of public that those who deposit money with Manappuram Finance Ltd or MAGRO do so at their own risk".

Manappuram Finance was earlier registered with the RBI as a deposit taking Non-Banking Financial Company. However, in March 2011 it became a non-deposit taking non-banking financial company.

However, in a response the NBFC had said it only accepts investments from the public through secured non-convertible debentures (NCDs) and subordinate bonds which do not fall under the definition of public deposits.

The company's statement, issued by Manappuram Finance Managing Director I Unnikrishnan, does not have any mention of Magro but only states that Manappuram Finance continues to be registered with RBI as a non-deposit taking NBFC.

Shares of Manappuram Finance were trading down by 15.48 per cent at Rs 48.05 on the BSE at 1253 hrs.