Tripura to probe illegal financial firms

March 7th, 2012 - 6:02 pm ICT by IANS  

Agartala, March 7 (IANS) The Tripura government has set up an Economic Offences Wing (EOW) to take action against illegal non-banking financial companies (NBFCs), which take deposits from people illegally promising hefty returns, a minister said here Wednesday.

“The EOW, headed by a Superintendent of Police (CID), was formed recently to probe the activities of the NBFCs and UIBs (un-incorporated bodies). At the district level, the wing would be led by the district police chief,” Tripura finance minister Badal Chowdhury said at a meeting here.

He said: “These NBFCs and UIBs have been formed under the Companies Act 1956. The state government has limited authority to take proper action against these organisations.”

The minister said that the state government has been asking the central government to form a regulatory body to supervise and to take appropriate actions against these bodies.

According to the minister, 117 NBFCs and UIBs have been functioning in Tripura for the past several years. “The state government has taken some action against 16 such groups.”

Opposition leader (Congress) Ratan Lal Nath said: “Various NBFCs have already duped lakhs of gullible investors in Tripura to the extent of nearly Rs.18.36 crore and their network disappeared all of a sudden.”

Unauthorised NBFCs and UIBs have mushroomed in the northeastern region in recent years. They mobilise deposits from people by promising abnormally high rates of interest, at 25 to 30 percent per annum.

After collecting the money, they shut down their operations and leave the area.

The finance minister said the Tripura government last year amended the “Tripura Protection of Interest of Depositors (in financial establishments) Act, 2000″ to take more stringent action against the illegal NBFCs and UIBs.

The amended act provides for imposition of 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.

“Large number of unauthorised NBFCs and UIBs have been collecting money, alluring people with assurances of very high returns and cheating innocent depositors,” Chowdhury said and urged the people not to deposit their hard-earned money in such companies.

“There is a need to put in place a regulatory body at the national level with its official arm extending to state level,” said the minister.

The NBFCs and the UIBs, not recognised by the Reserve Bank of India, the Insurance Regulatory and Development Authority (IRDA) or the Securities and Exchange Board of India (SEBI), cannot do any monetary business or take deposits from people.

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