RBI official asks state govt to tighten noose around NBFCs

Patna: With a view to tackling the menace of unauthorised companies raising deposits in Bihar, the state government has been asked to ensure widespread dissemination of Protection of Interest of Depositors (PID) Act provisions which mandate deposit companies to register their details with the respective district magistrates so that all financial establishments are under the radar of regulators.
The decision was taken at the 23rd state level co-ordination committee (SLCC) meeting chaired by chief secretary Anjani Kumar Singh here on Wednesday. "The state government has also been asked to activate special branch of CID that will collect intelligence in respect of financial companies," said M K Verma, Reserve Bank of India (RBI)'s regional director (Bihar and Jharkhand) and also the convenor of the meeting.
Verma gave a recent example of action on an erring financial institution in the state. "We found out that Real India Mutual Benefit Corporation Limited, a company registered in Kanpur, had opened a branch and started taking deposits in Buxar, which is illegal. The cops have been asked to shut down the establishment," he said.
At present, no non-banking financial company (NBFC) registered with the RBI is taking any deposits. "In all, 25 NBFCs in Bihar are registered with us. Of these, two have the licence to take deposits, but even they are not using the facility right now. All these companies are operating in micro-finance sector where they take loans from banks and forward it to local people," Verma said, adding, "Altogether 109 cases against NBFCs are underway in Bihar."
To provide a one-stop information to citizens about financial institutions under different regulators, a website of the SLCC will be launched by the RBI next month. "It will not just provide info about which companies are registered and legal, but also give a platform to them to lodge their complaints," Verma said, adding, "If anyone wants to know about such companies, they can call on 0612-2320291 during working days."