New Delhi, Feb 26: In the wake of multi-crore frauds involving banks and private companies, the Ministry of Finance has released a list of almost 9500 non-banking financial companies (NBFCs) which have been categorised as ‘high-risk financial institutions’. Also Read - Govt Not Considering Merger of CBDT, CBIC: Ministry of Finance
The list is prepared by the Financial Intelligence Unit (FIU-IND). The financial companies included in the list are those found non-compliant to the Prevention of Money Laundering Act (PMLA) rules as on January 31 by NBFC. Also Read - FM Sitharaman Meets Private Banks, NBFCs to Ensure Liquidity to MSMEs
Under Section 13 of the PML Act, 2002, the Director of FIU-IND can impose fine on any banking company, financial institution or intermediary for failure to comply with the obligations of maintenance of records, furnishing information and verifying the identity of clients. Also Read - Modifications in National Pension Scheme Financially Untenable: Finance Ministry
The NBFC can take administrative action and impose a monetary fine, which may vary between ten thousand and one lakh rupees for each failure.
Earlier, the Income Tax (IT) department and the Enforcement Directorate (ED) were probing several rural and urban cooperative banks for illegally converting banned currency notes of people who had the unaccounted income after the November 2016 demonetisation drive.