JAIPUR: The state government has speeded up the process to have a separate law to check cheatings by fly-by-night financial companies like the Gold Sukh Trade India Ltd. The provisions for such a law were discussed at a meeting between the senior officials of the state government and the Reserve Bank of India here on Wednesday. According to sources, the government was keen on drafting a regulatory bill that could be introduced in the assembly at its next session. The meeting on Wednesday was the first in this regard and a series of discussions involving the RBI officials and financial experts would follow in the coming days. Sources said the state government wanted either the RBI to amend its rules and regulations to check fraudulent financial companies, including the multi-level marketing firms that vanish with the investors' money, or let the state government to allow such companies to operate only at the recommendations of the district collectors. The RBI officials apparently objected to the second proposal saying it would amount to government stopping people from doing businesses. Provisions of the proposed Rajasthan Protection of Interests of Depositors (in financial establishment) Bill 2005 were discussed by principal secretary (home), GS Sandhu with the RBI officials and the police officers at the secretariat on Wednesday. In the past the bill was passed by the cabinet and sent to the Centre for its approval. The Centre, however, sent it back to the state government with some recommendations and since then the bill has been pending. With a serious of cheating cases surfacing all over the state in the past couple of days, the government has revived its efforts to get the bill signed into a law aimed at protecting the small investors. The Gold Sukh company, a multi-level marketing firm, alone is alleged to have duped a lakh of small investors all over the state. The government is even considering having a separate regulatory body for the non-banking financial firms that lure small investors with a promise to pay high returns. The government wants that such a regulatory body should have powers to take stringent action against financial institutions that fail to return the investor's deposit or interest. The bill under consideration has a provision to slap 10 years imprisonment along with a fine on the company owners who default in repayment of deposits. It allows seizure of establishment the company's assets. "One of the key features of the bill would be to define deposits. All transactions not coming under the banking or non-banking regulations will be included in the bill," a source, associated with the bill drafting, said. The definition of deposit is likely to cover any money deposited either in lump-sum or in instalments with a firm that assures an interest or a return of any kind or any service, said sources.
TOI
