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The Reserve Bank is examining the credentials of nearly 35,000 entities whose particulars were shared with it by the Ministry of Corporate Affairs (MCA) because of rising instances of fraudulent investment schemes.
The ministry had shared a list of 34,754 companies, which carry out financial business but don't appear to have been registered with RBI as Non Banking Finance Companies (NBFCs).
The central bank regulates NBFCs while all companies have to be registered with the MCA.
"Corporate Affairs Ministry undertook an exercise to identify companies which...Are capable of functioning as NBFC but may not be registered as such with RBI. 34,754 such companies have been identified and their details shared with the RBI so that companies not registered as NBFC could be prosecuted by the RBI.
"RBI is in the process of examining the details," Corporate Affairs Minister Sachin Pilot said in a written reply to Lok Sabha.
He also said that a communication has been sent to the Finance Ministry about such entities with a request to initiate criminal action against them under the RBI Act.
In a separate reply, Pilot said that Serious Fraud Investigation Office (SFIO) has submitted a status report to the government on alleged fraudulent money pooling schemes being run by 54 'Chit Fund Companies'.
These entities operating from the Eastern States were mobilising huge funds from the public for booking land, flats, and various other activities to camouflage receipts of deposits from public in violation of provisions of the Companies Act and the ban on 'money circulation' under the Prize Chits and Money Circulation Schemes (Banning) Act.
MCA, though not directly involved with the administration of either Prize Chit Act or the Chit Funds Act, has on its parts taken various steps like directing SFIO to share information about 54 entities with the Economic Offences Wing of police of the states concerned and the Enforcement Directorate.
Besides, SFIO is continuing investigations in coordination with banks and through seizure and search operations of many companies where promoters have not cooperated with investigations.
