Many NBFCs Not Following Rules, Says Home Minister

After the crackdown on loan sharks, the non-banking financial companies (NBFCs) have come under the police scanner.

Published: 21st May 2014 08:42 AM  |   Last Updated: 21st May 2014 08:42 AM   |  A+A-

THIRUVANANTHAPURAM : After the crackdown on loan sharks, the non-banking financial companies (NBFCs) have come under the police scanner.

Home Minister Ramesh Chennithala on Tuesday said a good majority of the NBFCs were not following the fair practice code prescribed by the Reserve Bank of India (RBI).

 ‘’Several NBFCs, including prominent names, do not follow the RBI code to publish interest rates. The matter will be taken up with the RBI and police will act upon complaints,” he told reporters here.

 The RBI code asks all NBFCs to publish their interest rates on websites and other media. The loanees should be given awareness on interest rates and other conditions.

 ‘’Though the RBI is the authority to act against such violation, the police can act up on specific complaints,’’ he said. The minister said micro-finance agencies are also liable to follow the RBI guidelines.  The government also plans to publish a list of genuine NBFCs and chitty firms.


Registration Minister Anoop Jacob said action was being taken against private chit firms which conduct chitties without registering with the local sub-registrar office.

 “Action was taken against 681 illegal chitties conducted by 31 illegal firms,” he said.


The minister said the police have been asked not to play the role of mediator in financial transactions. He was referring to the alleged inaction on the part of the Mannanthala police to register a case based on the complaint of Manoharan Asari of Mukkola here. Manoharan Asari and four other family members had committed suicide recently following the threat from the blade mafia.

 “The police didn’t register a case as Manoharan Asari requested for more time to pay. The officials have been asked to go by the book in such cases in future,” he said. As part of ‘Operation Kubera,’ the drive against blade mafia launched after the family’s suicide, 466 loan sharks were arrested, 788 cases registered and Rs 3.63 crore seized. A total of 5464 raids were conducted across the state between May 11 to 19.


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