The Reserve Bank of India has expressed dissatisfaction over inaction on the part of the State Government over implementing the Protection of Interest of Depositors (in Financial Establishments) Act, 2011. The Act is perceived necessary to curb illegal activities in the non-banking finance companies operational in the State and duping common people in large numbers.
The regulator bank in this regard participated in a quarterly meeting of SlCC comprising top officials including Chief Secretary Rajbala Verma on Monday where the issue discussed threadbare with some promises.
“The Act has been implemented in neighbouring Bihar but in Jharkhand despite getting passed in 2013, it is still lurking. This has made the depositors even more vulnerable with no kind of effective control over the chit fund companies. We have requested time and again to the State Government to act,” said MK Verma, Regional Director of the RBI, Patna displaying his helplessness over the indifferent attitude so far from the State Government.
The Act has provisions for designating officers in every district as competent authority to deal with financial cheating incidents along with special courts where the cases can be heard properly. Police officials at local level are also to be trained under the provisions.
As per RBI records only 16 NBFCs are registered to accept deposits from the people, however, there are numerous others operating under SEBI and other regulators without proper checks and balances. This throws the field open for the cheat companies to run amok and dupe the depositors with their hard earned money.
“The Chief Secretary in today’s meeting directed the Finance Department to notify designated officers in districts. Also the matter of designating courts for this purpose pending with the law Department has been told to expedite. We expect some progress at the earliest,” said Verma. The CS later directed all regulatory bodies such as RBI, SEBI, NHM to share list of all licenced institutions with the Government which would be forwarded to all districts.
It was also resolved that the provisions of the Act will be disseminated in the State so that the financial entities are informed about the need to file their returns before the competent authorities. list of NBFCs would be shared with the regulators so that the entities registered with them are identified and promoted. The other entities will be investigated and illegal ones will be identified for action by the law enforcement agencies.
Besides RBI, other regulators of NBFC sector viz Securities and Exchange Board of India, Insurance Regulatory and Development Authority of India, Registrar of Companies and National Housing Bank took part in the meeting.
The status of Jharkhand Moneylenders Bill, 2016 was discussed and it was decided that NBFCs duly registered with RBI and other regulators will be exempted from the provisions of this Act. The State Government will carry out public awareness programmes on precautions to be taken while placing deposits.