RBI asks NE States to trace 26 NBFCs

NEW DELHI, April 17: The Reserve Bank of India (RBI) has flashed alert notices to several Northeastern States including Assam Government asking them to be on the lookout for at least 26 non banking financial companies (NBFCs), which have vanished after duping gullible customers in the region. What is even more alarming is that 16 out of the 26 NBFC were located in Guwahati before vanishing into the thin air after duping customers. Next to Guwahati is Nagaon from where also a record number of such companies have vanished. The RBI has advised the names of the companies to the concerned state governments for initiating criminal action, apart from taking action under the provisions of the RBI Act, the Minister of State for Finance, Balasaheb Vikhe Patil informed the Rajya Sabha here today. Interestingly, even the Union Finance Ministry has no idea about the magnitude of the funds embezzled by the so called vanishing NBFCs or the number of customers duped by such companies but an indication could be had from the total deposits made these Institutions. According to record with the Ministry till March 31, 1999 these NBFCs had Rs 71.15 lakh deposits with them totalling fund deposits worth Rs 3,732.16 crore, countrywide. However, the Minister pleaded that a state-wide break up of deposits was not available with the RBI. In the Northeast, there are 272 NBFCs operating, according to the Minister. From February 25,2000 onwards, the RBI has been advising the names of all vanishing NBFCs, which are not traceable at their registered address or where letters sent have been returned undelivered, to the state governments for appropriate action, the Minister said. Comprehensive regulatory framework has been put in place, which is aimed at protecting the interests of the depositors and ensuring that NBFCs function on sound and healthy lines. The regulatory framework includes inter alia compulsory registration, maintenance of liquid assets, transfer of at least 20 per cent of net profits to reserve funds and empowering RBI to issue directions to NBFCs.