Court directs RBI, state, Centre to file affidavits on NBFCs

Patna, Nov 8 (UNI) Patna High Court today directed the Reserve Bank of India (RBI), the Centre and the state government to file separate affidavits within six weeks mentioning details about Non-Banking Financial Companies (NBFC) misappropriating Rs 12,762 crore rpt Rs 12,762 crore belonging to daily wage earners and small investors.

While hearing a PIL of Council for Protection of Public Rights and Welfare, a division bench of the court of chief justice Dr J N Bhatt and Justice Shailaish Kumar Sinha, sought detailed information about the NBFCs in question.

During the hearing, the court was informed that the government had not initiated any action against the companies even after recommendations of former Justice Nagendra Rai, who had probed into their affairs in the capacity of the chairperson of the inquiry committee constituted in August 1997, to probe into the complaints made against the NBFCs.

The court was informed Mr Rai had submitted the interim report on November 5, 1999 and the final report in August 2000 in which it was mentioned that Helios Company functioned from the residence of former Director General of Police R R Prasad. After a ban by the RBI, this company started functioning by changing its name.

Being apprised of the facts, the court directed the RBI, Union and the state governments to file affidavits about these companies.

Through the PIL, the petitioner had requested the court to initiate action against these non-banking companies, which had misappropriated Rs 12 crores belonging the daily wage earners, small investors and cancel the registration of such companies.

The petitioner also requested the court to implement the recommendations of former justice Mr Rai.

Altogether 4,45,560 cases were lodged against 485 NBFCs.

UNI XC-RS JYN/TJP/LS VV1533