Punjab Finance Minister Parminder Singh Dhindsa on Tuesday issued instructions to all the District Additional Deputy Commissioners (Development) to book any State chit fund company as the Punjab Government has declared the business illegal.
The directions were issued by Dhindsa while presiding over a meeting of all Joint Directors, Institutional Finance and other senior officers concerned of the department.
He said that district ADC have been designated as Joint Director Institutional Finance and Banking. “The meeting has been especially convened to aware them of the functioning of Non-Banking Financial Companies (NBFCs), rights and responsibilities and also about the legal issues pertaining to these financial companies,” he said.
The Minister said under the Chit Fund Act, 1982, (Central Act 1982), the Government has notified ADC (Development) as Joint Registrar of Chits.
At present, there was no registered chit fund firm with the State Government. “Offences under this Act are cognisable and police can register cases under this Act,” he added.
Dhindsa said that this meeting of ADC (Development)-cum-Joint Director, Institutional Finance has been called in view of various fraud cases which are being reported in media.
“In Punjab also, the State Government has come to know that such money collecting schemes, multi-layer marketing schemes are in operation which has been banned under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978,” said Dhindsa.
He added, various preventive steps to stop such frauds were also discussed in the meeting. “All the enquiries were answered by senior officers of Reserve bank of India (RBI) and Securities and Exchange Board of India (SEBI),” he said.
Regarding Non Banking Finance Companies, he said that two types of companies have been registered by the RBI. “Category ‘A’ which are authorised to take deposits and other category ‘B’ companies which are not authorised to take deposits under the RBI Act,” he added.