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Tripura gets tougher law for illegal financial firms

The Tripura government has enforced a tougher law which provides extra protection to those depositing money in unauthorised Non-Banking Financial Companies (NBFCs), a minister said here Thursday. 

“Governor DY Patil recently gave his assent to the amendment bill of the Tripura Protection of Interest of Depositors (in financial establishments) Act, 2000 and the state cabinet Tuesday approved necessary rules,” Tripura Finance Minister Badal Choudhury told reporters.

Accordingly, a notification to this effect was issued Thursday, he said.The Tripura government, during the last session of the assembly in March, had passed a new bill amending the Tripura Protection of Interest of Depositors (in financial establishments) Act, 2000. 

The bill was moved for enhancing the level of protection of the depositors in monetary firms, including NBFCs and UIBs (Un-Incorporated Bodies). 

The new act has the provision to impose a fine of Rs 10,000 for every flawed provision and act by the NBFCs and UIBs and in addition Rs 1,000 per day for continuation from the date of default. 

“Large number of unauthorised NBFCs and UIBs have been collecting money, alluring people with assurances of very high returns and cheating the innocent depositors,” Chaudhury said. 

“There is a need to put in place a regulatory body at national level with its official arm extending to state level,” said the minister. 

Unauthorised NBFCs have mushroomed in the northeastern region in recent years. These organisations take deposits from people by promising abnormally high rates of interest from 25 to 30 percent. After collecting the money, they shut down and leave the area. 

The NBFCs, not recognised by the Reserve Bank of India, the Insurance Regulatory and Development Authority (IRDA) or the Securities and Exchange Board of India (SEBI), cannot do any monetary business or take deposits from people.

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