18 Feb, 2007 2317hrs
PATNA: The non-banking financial companies (NBFCs) have duped thousands of innocent people in utter violation of the rules and regulations framed for their functioning. One such depositor Navkant Jha, a resident of Triveniganj in Supaul district, was shocked to learn that the cheque for Rs 5,227, which he had sought from the Central Bank Employees Cooperative Society against his deposit of Rs 50 daily for over six months, had bounced. Interestingly, the said Society was being run by the son of a bank employee. Both the Society as well as the agent, Bipin Kumar, who used to collect Rs 50 daily from Jha, did the vanishing act in the meantime. Jha's case was detected by a senior official of the institutional finance department. "Thousands of people, who had deposited their hard-earned money, ranging from Rs 10 to Rs 50 daily, were duped of about Rs 1 crore. The Society had even issued passbooks to the depositors, which bore a striking resemblance with the ones issued by the Central Bank of India," the official added. Things came to such a pass that even the regulatory recommendations of the Nagendra Rai Commission, which was set up to check the duping act of the NBFCs after the issue was first raised in 1997, failed to check the menace. Officials said that the NBFCs, which primarily operated along the Bihar-Nepal border, lured people into investing money in plantation or housing schemes in far-flung areas like Gurgaon in exchange of astronomical returns. "After having collected money for two years, the promoters of such NBFCs did the moonlight flit and took refuge in Nepal, thus leaving the state police high and dry," an official said. In its recent affidavit filed before the Patna High Court in connection with a case (the Council for Protection of Public Rights and Welfare vs Union of India and Others), the Patna office of the Reserve Bank of India had appended a list of 188 such NBFCs which had done the vanishing act in 2004 and 2005. These companies, which do not include big names like the JVG and Helios, are estimated to have disappeared with a whopping sum of Rs 187 crore during the said period. In December 2006, the state CID submitted a list of such fake NBFCs to the RBI and asked it to approach the SPs concerned for action. However, no headway was made in this regard. Officials point out that a majority of the 435 NBFCs doing "business" in the state have already disappeared. In 1999, the RBI made it mandatory on part of the NBFCs to submit a sum of Rs 25 lakh for obtaining licences to run their business, they said. "However, between 1997 and 1999, the small depositors had already been fleeced of crores of rupees," a senior official said. Though the state government blames the RBI for reacting late, on its part, it has done little to make the directorate of NBFCs functional.
PATNA: The non-banking financial companies (NBFCs) have duped thousands of innocent people in utter violation of the rules and regulations framed for their functioning. One such depositor Navkant Jha, a resident of Triveniganj in Supaul district, was shocked to learn that the cheque for Rs 5,227, which he had sought from the Central Bank Employees Cooperative Society against his deposit of Rs 50 daily for over six months, had bounced. Interestingly, the said Society was being run by the son of a bank employee. Both the Society as well as the agent, Bipin Kumar, who used to collect Rs 50 daily from Jha, did the vanishing act in the meantime. Jha's case was detected by a senior official of the institutional finance department. "Thousands of people, who had deposited their hard-earned money, ranging from Rs 10 to Rs 50 daily, were duped of about Rs 1 crore. The Society had even issued passbooks to the depositors, which bore a striking resemblance with the ones issued by the Central Bank of India," the official added. Things came to such a pass that even the regulatory recommendations of the Nagendra Rai Commission, which was set up to check the duping act of the NBFCs after the issue was first raised in 1997, failed to check the menace. Officials said that the NBFCs, which primarily operated along the Bihar-Nepal border, lured people into investing money in plantation or housing schemes in far-flung areas like Gurgaon in exchange of astronomical returns. "After having collected money for two years, the promoters of such NBFCs did the moonlight flit and took refuge in Nepal, thus leaving the state police high and dry," an official said. In its recent affidavit filed before the Patna High Court in connection with a case (the Council for Protection of Public Rights and Welfare vs Union of India and Others), the Patna office of the Reserve Bank of India had appended a list of 188 such NBFCs which had done the vanishing act in 2004 and 2005. These companies, which do not include big names like the JVG and Helios, are estimated to have disappeared with a whopping sum of Rs 187 crore during the said period. In December 2006, the state CID submitted a list of such fake NBFCs to the RBI and asked it to approach the SPs concerned for action. However, no headway was made in this regard. Officials point out that a majority of the 435 NBFCs doing "business" in the state have already disappeared. In 1999, the RBI made it mandatory on part of the NBFCs to submit a sum of Rs 25 lakh for obtaining licences to run their business, they said. "However, between 1997 and 1999, the small depositors had already been fleeced of crores of rupees," a senior official said. Though the state government blames the RBI for reacting late, on its part, it has done little to make the directorate of NBFCs functional.
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