In Manipur, people love to deposit big amounts in non banking financial companies in the greed of big Interest. Notable presence of such practice of saving in private financial institutions is against the stated guidelines of Reserve Bank of India. This was said by L Jogendro, Assistant Director of Institutional Finance.
L Jogendro further shared that we can see lots of complaints against this practice. People choose to deposit in non banking financial companies for enjoying big amount as Interest. Several complaints were even forwarded to President of India and also to RBI. Thus, RBI has acted in this direction and formed a State level coordination committee. This committee has started monitoring activities of several non banking financial companies and private banks in the state.
The Additional Director also informed that other than State level coordination committee formed by RBI, one subcommittee lead by DIG, the state police have also been recently formed and that too has started the discussion with representatives of these non banking financial companies. Report of this committee will be sent to State Government and also Reserve Bank of India. After that, this committee will begin actions as per RBI instructions.
Assistant Director of Institutional Finance, L Jogendro further explained that all such non banking private financial companies in Manipur are registered under three acts; Manipur Cooperative Society Act 1976, Bombay Money Lenders Act 1946 and Indian Partnership Act 1932. One such financial company might have been registered under any of these acts. But, none of these acts allows such provision of offering huge interest rate. We have noticed that non banking private financial companies are offering indecent offers like depositing money for interest at the rate of around 3 percent per month. This is absolutely against the stated guidelines of RBI.
He further told that these various private banks in Manipur state are also generating revenue for the State and they are not allowed to operate against the guidelines laid down by RBI. As per the guidelines of RBI, the possible interest rate can be around 5 to 7 percent per annum. Thus, the act of these private banks/ non banking financial companies is completely against the law.
While sharing about the finding of the State level coordination committee, L Jogendro shared that many of such private banks in Manipur do not maintain proper cash books or accounts. The subcommittee has also found that over seventy firms registered under IPA 1932 have closed down because of their incompetence regarding loan collection from the people. All such firms had interest rates of around 2.5 to 3.5 percent per month.
During the investigation, it was also that noticed that one leading financial company in Manipur which has 244 shareholders and working capital of 1.26 crore is practising in an illegal way as its 102 said shareholders were waiting for approval from Registrar of Cooperative Society. This provision was applied as maximum 142 shareholders are allowed as per stated guidelines. Also, a big amount was found under saving deposit term in company’s cash book. In the investigation, the company shared that these funds were for its staff. This point is under suspicion that such amounts were deposited by the common man and the company might have been diverted these funds through Credit Societies to avoid inclusion of these funds under the Money Laundering Act.
Assistant Director of Institutional Finance, Mr. Jogendro have appealed to the people to be cautious about depositing money in the private banks which might be functioning against the stated guideline of Reserve Bank of India.