Ranchi, May 7: The financial future of lakhs of people is at peril with the Reserve Bank of India asking all banks to stop money transaction with 918 non-banking financial corporations (NBFCs) across Bihar and Jharkhand.

Some hundred NBFCs, including several in Ranchi, have their addresses registered in Jharkhand.

The circular, dated April 30, follows a directive from Patna High Court, which, in its order on April 10, listed the financial firms as “defaulted companies”.

N.S. Vishwanathan, the chief general manager-in-charge of RBI, issued the notice to all banks of the state to seize the accounts of all such NBFCs, which have not filed audit report and balance sheets as on March 31, 2007.

The Patna High court had given an interim order on April 10 hearing a case lodged by Council for the Protection of Public Rights and Welfare against Union of India and Others in which it has alleged that “there has been a great fraud and misappropriation of money of not less than Rs 12,000 crore deposited by poor people, namely, daily wagers, small investors, pensioners by the vested interest people”.

The next date of hearing of the case is May 22. But, in the meantime, the court has directed to restrain all the 918 defaulted companies from “dealing, transferring, alienating, creating encumbrances, or any sort of transactions or mortgage with regard to their assets without prior permission of this court, failing which serious view will be taken”. It has also directed the RBI to issue appropriately strict instructions to all the banks.

Efforts to locate the NBFCs in Ranchi went futile today.

R.N. Singh, the chief manager of state-level bankers’ committee, said they were yet to be communicated of the RBI decision, but admitted there were many fake NBFCs functioning from the state.

K.K. Sinha, the officer-on-special duty at institutional finance department, said action would certainly be taken against such NBFCs.