Source:27 Apr 2010, 1639 hrs IST,PTI
NEW DELHI: Reserve Bank had declared 108 Non Banking Financial Companies (NBFCs) as vanishing companies during the last three years, Rajya Sabha was informed today.
"Whenever a company is declared as vanishing the matter is referred to the Economic Offences Wing of the concerned state government," Minister of State for Finance Namo Narain Meena said in a written reply.
The onus is on the state police machinery to investigate the case and take legal action as deemed appropriate, including penal action as per Indian Penal Code or Criminal Procedure Code, he said.
It is mandatory that every NBFC should be registered with RBI to commence or carry on any business of non-banking financial institution, he said.
RBI has been empowered to impose penalty on NBFCs for violation of the provisions of the RBI Act 1934.
In order to protect the interest of investors, he said, RBI has strengthened market intelligence system for picking early warning signals about the health of a particular NBFC and take preemptive action.
In another reply, Meena said based on the recommendations of the Vaidyanathan Task Force II, the government had approved the Revival Package for Long Term Cooperative Credit Structures with a total outlay of Rs 3,070 crore.
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