Fixed Deposits

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 July 2010 We are a registered partnership firm. Having a small scale manufacturing unit.
Instead of paying 13% interest on borrowings to Banks,we are encouraging our friends and relatives to keep fixed deposits with us with 12% interest. It is a win-win situation. They get more returns. We save 1% and money goes to friends and relatives instead of Bankers.
However someone told me that as per RBI regulations we have to register as NBFC otherwise we can not take FDs.
Any alternative rout?

sushil sharma

sushil sharma (Expert)
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13 September 2010 You can take amount from your friends as unsecured loans. In this case you will have to deduct TDS & issue TDS certificate. You can't take money on the name of FD as per RBI RULES.