Regulatory body sought to check illegal financial firms
March 10th, 2011 - 7:30 pm ICT by IANSAgartala, March 10 (IANS) The Left Front government in Tripura Thursday urged the central government and the Reserve Bank of India (RBI) to constitute a regulatory body and form a national policy to check the spurt of illegal non-banking firms.
“Large number of unauthorised Non-Banking Financial Companies (NBFCs) and Un-Incorporated Bodies (UIBs) have been collecting money, alluring people with assurances of very high returns and cheating the innocent depositors,” Tripura Finance Minister Badal Chaudhury said.
“In order to monitor and supervise funding of these NBFCs and UIBs, there is a need to put in place a regulatory body at national level with its official arm extending up to state level,” said Chaudhury, after presenting a tax-free Rs.6,859.45 crore budget for the 2011-2012 fiscal with a deficit of Rs.246.58 crore.
Unauthorised NBFCs have mushroomed in the northeastern region in recent years. These organisations take deposits from people by promising abnormally high rates of interest from 25 to 30 percent. After collecting the money, they shut down their operations and leave the area.
The NBFCs not recognised by the RBI, the Insurance Regulatory Development Authority (IRDA) or the Securities and Exchange Board of India (SEBI) cannot do any monetary business or take deposits from people.
The Tripura government, during the ongoing budget session of the state assembly, moved a new bill amending the Tripura Protection of Interest of Depositors (in financial establishments) Act, 2000 for enhancing the level of protection of the depositors in monetary firms, including NBFCs and UIBs, by providing more teeth to the existing legislation.
The new bill proposed to impose a fine of Rs.10,000 for every flawed provision and act by the NBFCs and UIBs and in addition Rs.1,000 per day for continuation from the date of default.
“The RBI would soon open branches in many northeastern states and that would help to deal with these unscrupulous NBFCs and UIBs,” Chaudhury said after presenting the state budget.
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- Actions against illegal NBFCs in Tripura to continue - Jun 20, 2010
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- Staff of illegal non-banking bodies arrested in Tripura - Jun 12, 2010
- Action needed against illegal non-banking firms: RBI - Jul 15, 2010
- No RBI approval needed for bank branches in northeast: minister - Dec 30, 2010
- Centre denying us funds, says Tripura - Feb 07, 2011
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- RBI wants banks to serve villages, says official - Sep 28, 2010
- RBI to open more offices in northeast - May 05, 2011
- RBI proposes new regulations for non-banking finance firms - Aug 29, 2011
- RBI to set up more offices in northeast - Nov 06, 2010
Tags: act 2000, badal, bank of india, budget session, chaudhury, depositors, exchange board, finance minister, financial establishments, incorporated bodies, insurance regulatory development authority, northeastern region, northeastern states, regulatory body, regulatory development, reserve bank of india, sebi, securities and exchange board of india, state assembly, tripura government