The Reserve Bank of India (RBI) on Friday advised the public to be very careful before depositing their funds in any scheme run by non-banking finance companies (NBFCs).

Amid increasing incidents of sham investment schemes hitting investors, the central bank stressed that investors must carefully evaluate any scheme to avoid falling prey to fraudulent schemes that promise unsustainable returns.

RBI said in a statement, "Investors must generally be circumspect if the interest rates or rates of return on investments offered are higher than those offered by others in the market place."

RBI underlined that no entity would be able to repay promised returns to investors unless it earned more than that.

The central banks advised that investors should take note that the NBFC is registered with the central bank and has the authority to accept public deposits. Investors can ask the NBFC to show the Certificate of Registration (CoR) issued by central bank.

The apex bank issued the advisory as part of its Frequently Asked Questions (FAQs), which explain in details different sorts of financial entities as well as the regulations that govern them.

RBI also declared that it didn't guarantee the repayment of deposits accepted by any NBFC.