NBFCs that ought to have sought registration from RBI but are functioning without doing so are committing a breach of law. Such companies are liable for action as envisaged under the RBI Act, 1934. To identify such entities, RBI has multiple sources of information. These include market intelligence, complaints received from affected parties, industry sources, and exception reports submitted by statutory auditors in terms of Non-Banking Financial Companies Auditor’s Report (Reserve Bank) Directions, 2008.
Further, the
State Level Co-ordination Committees (SLCC) is convened by RBI in all
the States/UTs on quarterly basis. The SLCC is now chaired by the Chief
Secretary/ Administrator of the concerned State/UT and has, as its
members, apart from the Reserve Bank, the Regional Directorate of the
MCA/ ROC, local unit of SEBI, NHB, Registrar of Chits, ICAI, Economic
Intelligence Unit of the State Police and officials from Law and Home
Ministries of the State Government. As all the relevant financial sector
regulators and enforcement agencies participate in the SLCC, it is
possible to quickly share the information and agree on an effective
course of action to be taken against entities indulging in unauthorized
and suspect businesses involving funds mobilization from public.
