Odisha passes depositors interest protection bill

The Bill was passed with few amendments moved by Finance Minister Prafulla Ghadai last night.

Last Updated: Dec 18, 2011, 16:21 PM IST

Bhubaneswar: With aim to protect interest of depositors in non-banking financial companies (NBFCs)and un-incorporated bodies (UIBs), the state assembly has passed Odisha Protection of Interest of depositors (in Financial Establishments) Bill, 2011.
The Bill was passed with few amendments moved by Finance Minister Prafulla Ghadai last night. "The new legislation will help curb illegal activities of unscrupulous NBFCs and UIBs," Ghadai said.
The Bill will protect the interest of depositors by way of return of their deposits with benefits/interests at the instance of the state government. "The existing RBI Act does not have provision to protect the interest of common depositors," he said.

With a number of NBFCs and UIBs luring the people with high returns and vanishing overnight leaving the common depositor frustrated, the government had no alternative but to bring in a stringnet legislation to curb the menace, the
minister said.

It had been observed that some NBFCs and UIBs collect and receive deposits with sole intention of defrauding the people in different parts of the state, mostly in remote areas.

The new legislation has the provision of making it mandatory for all such institutions to register themselves with the government.

PTI