RBI for special courts to try NBFC cases

Patna: The registrar of chits (ROC) operates in Bihar, but that’s hardly a deterrent to fraudulent non-banking finance companies (NBFCs) as the state has not constituted special courts to hear cases related to such frauds. As the Protection of Interest of Depositors' (PID) Act remains only on paper, Reserve Bank of India (RBI)’s regional director (Bihar-Jharkhand) M K Verma said on Thursday evening he would raise the issue of special court with the state government at the state level coordination committee meeting to be held next month.
Denying that all the NBFCs are villains, Verma said the goal of financial inclusion could not be achieved without them as they provide banking solutions at customers' doorsteps even in places where banking facilities do not exist. Many NBFCs that are into resale of used vehicles and microfinance were helping the needy, he said and added good NBFCs needed to be nurtured.
Addressing newsmen after a daylong workshop to train 38 senior deputy collectors and update them with NBFC-related developments, Verma said the state government must designate courts in every district to hear NBFCs-related cases at least once every week, to start with. At least 60 such cases are currently pending across the state. Verma said RBI recently raised the minimum amount for starting an NBFC to Rs 2 core to eliminate non-serious players. Also, no NBFC is allowed to accept deposits for less than a year or more than five years.