Rate of Interest, Alteration of Terms & Credit Rating [Rule 3(6)–(8)]
# Pricing, Stability and Rating Rules
## Ceiling on Rate of Interest & Brokerage [Rule 3(6)]
The maximum rate of interest and brokerage that a company can offer/pay on its deposits is capped at the rate prescribed by the RBI that NBFCs may pay on their public deposits.
Rationale: Prevents companies from luring depositors with sub-NBFC-quality risk at NBFC-equivalent or higher pricing.
## No Adverse Alteration in Terms [Rule 3(7)]
Once the circular/advertisement has been issued and deposits accepted:
The company cannot alter any term/condition of —
the deposit,
the deposit trust deed,
the deposit insurance contract,
— if such alteration is to the prejudice or disadvantage of the depositor.
(Beneficial alterations are not prohibited.)
## Mandatory Credit Rating [Rule 3(8)]
Applicable to every eligible company accepting public deposits:
Obtain credit rating at least once a year.
A copy must be sent to the Registrar of Companies along with the return of deposits in Form DPT-3.
Rating must not be below the minimum investment grade rating (or other specified rating for fixed deposits) from any one of the approved credit rating agencies.
Worked example
### Example 1
Example 1 — Rate ceiling: If RBI permits NBFCs to pay a maximum of 12.5% p.a. on public deposits, no company under the 2013 Act may offer above 12.5% on its deposits.
### Example 2
Example 2 — Alteration: A company offered 10% interest. Mid-tenure it tries to reduce it to 8%. This is prohibited under Rule 3(7) as it prejudices depositors. However, raising the rate to 11% (benefit to depositor) is not barred by this rule.
### Example 3
Example 3 — Rating: An eligible company receives a 'BBB-minus' rating which is below investment grade. It cannot continue accepting deposits until the rating reaches the prescribed investment-grade threshold.
⚠️ Common exam mistakes
Assuming the interest cap is fixed at a number (e.g. 12%) — it floats with the RBI's NBFC ceiling.
Believing all alterations are barred — only adverse ones are.
Thinking a single rating at the start of deposit-taking suffices — rating must be obtained AT LEAST ONCE A YEAR.
Bare-Act text Rule 3(6), 3(7), 3(8) · Companies (Acceptance of Deposits) Rules, 2014 · click to expand
Rule 3(6) — No company referred to in sub-section (2) of section 73 or any eligible company shall invite or accept or renew any deposit in any form, carrying a rate of interest or pay brokerage thereon at a rate exceeding the maximum rate of interest or brokerage prescribed by the Reserve Bank of India for acceptance of deposits by non-banking financial companies.
Rule 3(7) — The company shall not reserve to itself either directly or indirectly a right to alter, to the prejudice or disadvantage of the depositor, any of the terms and conditions of the deposit, deposit trust deed and deposit insurance contract after circular or circular in the form of advertisement is issued and deposits are accepted.
Rule 3(8) — Every eligible company shall obtain, at least once in a year, credit rating for deposits accepted by it...