New Delhi, July 20 (PTI): The Reserve Bank of India has started scrutinising credentials of companies suspected of illegally raising money from the public as non-banking finance companies (NBFCs). The move is part of the apex bank’s efforts to protect gullible investors from fraudulent investment schemes.
The corporate affairs ministry had sent a list of more than 34,700 companies that came under its scanner for allegedly pooling money as NBFCs.
The ministry had prepared the list early last year when the Rs 10,000-crore Saradha chit fund scam — that duped thousands of investors of their hard-earned money — came to the fore.
Sources said the Reserve Bank had begun analysing the details of the entities, which are believed to have raised money from the public illegally without getting registered as NBFCs.
The cases are being pursued after a direction from the corporate affairs ministry to probe 34,754 companies (other than those registered with the Reserve Bank).
NBFCs are regulated by the RBI.
Sources said all the entities, which are under the scanner, would be provided an opportunity to clarify their positions before any action was taken.
The exercise has revealed that 4,102 companies were registered with the RBI as NBFCs.
In the second stage, sources said, the RBI focused on the remaining 30,652 companies and it revealed that 13,647 companies were not meeting the business criteria requiring certificate of registration for functioning as NBFCs.
Further, complete information on 6,182 companies is not available on the ministry website and 4,125 companies are under liquidation.
Of the remaining 6,698 companies, only 213 are accepting public deposits and 1,643 are meeting business criteria for NBFC certification, sources said. Almost 4,842 companies are ineligible for registration as NBFCs.
Sources also said the RBI had reported that there were 543 NBFCs operating in different states and Union territories which are not registered with the central bank, against whom complaints regarding non-payment of investors’ money had been received or noticed by the RBI during the three calender years till June 30, 2014.
As the government readies a new bill for empowering Sebi to take on fraudsters and defaulters, the number of attachment orders passed by the capital market watchdog with the help of an ordinance has crossed 1,300 for recovery of penalties and dues in nearly 400 cases.
The ordinance, which had to be promulgated thrice to empower Sebi to pass the attachment orders and launch recovery proceedings against fraudsters and market manipulators, including those running illegal deposit schemes, lapsed today.