Court orders constitution of NBFC directorate

PATNA: Expressing displeasure over the inordinate delay in constituting the directorate of Non-Banking Financial Companies (NBFC), the Patna High Court directed the Centre to constitute the NBFC directorate by February 28 to regulate and recover the swindled money of investors.

A division bench comprising chief justice JN Bhat and justice SK Sinha passed the order while hearing a PIL filed by an NGO, Council for Protection of Public Rights and Welfare, which alleged that NBFCs had swindled Rs 12,000 crore of small investors before leaving the state. The Centre had in 2002 decided to constitute the directorate which has not been operational as yet.

The court also asked the RBI and registrar of companies to identify NBFCs allegedly involved in the swindle and take legal action against them.