Depositing cash in Private banks not under RBI guidelines
Source: The Sangai Express
Imphal, March 09 2018:
Assistant Director of Institutional Finance, L Jogendro has said that the practice of depositing huge amounts of money in the numerous private financial companies/institutions present in the State, is against RBI's guidelines.
He informed that some complaints against the practice of depositing huge sums in private bank or non banking financial companies in the State in the hope of getting larger interest, were even sent to the President of the country and has now reached RBI.
As per the instruction of RBI, a State level coordination committee was formed and it has started monitoring the various private banks as well as non banking financial companies of the State, he added.
The Additional Director informed that a sub committee chaired by a DIG of the State police was also formed and it has started meeting representatives from such companies.
He added that the reports gathered by the committee will be sent to RBI and the State Government will begin taking up necessary actions as per the instructions of RBI.
The Additional Director explained that some of the private banks and non banking private financial companies in Manipur are registered under the Manipur Cooperative Society Act 1976 while some are registered under Bombay Money Lenders Act 1946 while others are registered under Indian Partnership Act 1932.Although they are registered under different authorities, the practice of depositing money in such companies for interest at the rate of around 3 percent per month, is against RBI's guidelines, he claimed.
As per the guidelines of RBI, the interest rate of banks is around 5 to 7 percent per annum and as such the interest rate charged by the private banks/ non banking financial companies is against the law.
Jogendro said that though the numerous private banks present in the State also help in generating revenue for the State, apart from helping the people, these banks cannot operate against the guidelines laid down by RBI.
He claimed that as per the findings of the State level coordination committee, most of these banks do not maintain proper cash books or accounts.
The Bombay Money Lender Act 1962 and the Indian Partnership Act 1932 also do not have proper provision for audit although there are some firms which do hire chartered accountants for audits.
According to the investigation of the sub committee, it was found that 72 firms registered under IPA 1932 have closed down due to failure to collect the loan amounts from the people.It was also found that these firms had interest rates of around 2.5 to 3.5 percent per month, he added.
The Additional Director informed that during the investigation, one of the leading financial companies in the State, was found having a working capital of around Rs 1.26 crore and 244 shareholders.
It was also found that 102 of the said shareholders (142 is the maximum number allowed) were waiting for approval from Registrar of Cooperative Society.
The sub committee also found large sums under term deposit and saving deposit in the company's cash book but as per the company's claims, these funds were for the staff, the Additional Director mentioned and expressed suspicion that the sums deposited by the people might have been diverted through Credit Societies so as not to be included under the Money Laundering Act.
Jogendro also appealed to the people to be wary of depositing their money in private banks and non banking financial companies which might be operating against the RBI's guidelines.
Comment
