Lok Sabha Question No. 1198 (UNSTARRED), answered on 2019-11-25
Subject: Foreign Funds through NBFCs
Ministry: CORPORATE AFFAIRS
Asked by: Shivkumar Chanabasappa Udasi

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

LOK SABHA UN-STARRED QUESTION NO. 1198 ANSWERED ON MONDAY, THE 25 th  NOVEMBER, 2019 [AGRAHAYANA 23, 1940 (SAKA)]

## FOREIGN FUNDS THROUGH NBFCS QUESTION

## 1198. SHRI SHIVAKUMAR C. UDASI:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

कारपोरेटकार्यमंत्री

- (a) whether the Government is aware that foreign funds, using NBFCs as proxy banks, are leaving India and Indians poorer;
- (b)  if  so,  the  details  thereof  along  with  the  number  of  fraud  cases committed by vanishing companies, number of investors cheated, amount involved, State/UT-wise;
- (c)  the  details  of  existing  guidelines  laid  down  to  protect  the  investors from such fraudulent companies; and
- (d)  the  other  steps  taken/being  taken  by  the  Government  to  protect  the investors from such vanishing companies?

ANSWER

THE MINISTER OF STATE FOR FINANCE

AND CORPORATE AFFAIRS (SHRI ANURAG SINGH THAKUR)

वित्त एिं कॉर्पोरे ट कार्यमंत्रालर् में राज्यमंत्री

( श्रीअनुराग व ंह ठाक ु र )

(a) &(b):The Government in the Ministry of Corporate Affairs has no such information.

(c) &  (d):  The  Reserve  Bank  of  India  (RBI)  has  informed  that  to effectively deal with cases of unauthorised collection of funds by fraudulent entities,  State  Level  Coordination  Committees (SLCCs) have  been  set  up  in  all  the  States  with  participation  by  State Government officials,  Law  Enforcement  Agencies,  RBI,  Securities Exchange  Board  of  India  (SEBI),  National  Housing  Board  (NHB), Ministry of Corporate Affairs (MCA), The Pension Fund Regulatory and Development Authority (PFRDA)etc. SLCCs were reconstituted in  April,  2014  with  the  Chief  Secretary  as  the  Chair  and  the frequency  of  the  meetings  increased  from  twice  a  year  to  four times a year. Agenda of the meetings of SLCC, inter alia, includes sharing of Market Intelligence (MI) regarding unauthorized deposit mobilisation,  organising  investor  /  public  awareness  campaigns, etc.

A mobile-friendly SLCC website (Sachet) was launched in 2016 to facilitate  public  to  lodge  complaints  regarding  unauthorized  fund collection/non-repayment  of  deposit  by  unscrupulous  entities.  In order to deepen and widen the outreach for obtaining information on  unauthorized  collection  of  deposits/Ponzi  schemes,  the  portal has been upgraded and made available in 11 Regional languages in addition  to  Hindi  and  English,  which  were  already  available. Additionally, the portal enables SLCC members to share MI inputs and  also  helps  in  spreading  financial  literacy  as  it  contains material on financial literacy in 13 languages.

The  Central  Government  (MCA)  has  set  up  Investor  Education and  Protection  Fund  Authority  on  7 th   September,  2016  under section  125  of  the  Companies  Act,  2013  with  the  objective  of promoting investor education, awareness, protection and to make refund of claim to the investors. To reach out to the Investors and sensitise  about  filing  of  applications  for  refund,  IEPF  Authority issues  advertisement  and  awareness  creating  messages  through print and electronic media from time to time.

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