The Reserve Bank of India (RBI) on Friday cautioned the people of Bihar and Jharkhand against investing or depositing in unverified non-banking finance companies.
Only 41 such companies are registered in the two states, the RBI said, of which two are eligible to take deposits.
RBI regional director (Bihar and Jharkhand) Manoj Kumar Verma said people should be aware about where to invest their hard-earned money so that fraudulent companies cannot dupe them.
"There have been two cases in the past three months where fraudulent companies have fled with investors' money," Verma said. "Already 95 such cases are pending with the economic offences unit (EOU) of Bihar police. The companies involved are yet to return the money deposited with them by the public."
Moreover, 79 financial companies with addresses in different parts of the state have vanished. The state government has been provided details about them and investigations are on to find their wrongdoings and trace the people concerned.
The RBI regional director's warnings came after he attended the 21st state-level coordination committee meeting on non-banking finance companies for Bihar. Also present at the meeting were chief secretary Anjani Kumar Singh, principal finance secretary Ravi Mittal, RBI general manager R.K. Hansda and manager Pravin Kumar, and officials from the cooperative department, EOU, SEBI, Registrar of Companies (ROC) and other concerned agencies.
The apex bank has also asked the state government to disseminate awareness about the issue through pamphlets and posters. Advertisements will be aired on television and radio, while police station house officers have been made responsible for non-reporting of operations by financial establishments in their areas.
"One respite is that there have been just two cases of non-banking finance company fraud over the last three months. It could be possible owing to action by the state and other related authorities as well as increased awareness among the public," Verma said.
He added that all the agencies concerned at the meeting have decided that of the 95 cases pending with the EOU in the state, those registered before 2012 will be settled on a priority basis through designated courts. The ROC has initiated liquidation process for 260 inactive cooperative societies in Bihar.
The finance department has accepted RBI suggestions to put up information about wrongdoings of non-banking finance companies on its website. The idea is to name and shame such companies as well as make people aware.
