RBI forms committee to monitor shadow banking; realty in focus

  • Sanjib Kr Baruah, Hindustan Times, New Delhi
  • Updated: Aug 17, 2014 23:25 IST

With a large number of financial scams coming up in recent years, the Reserve Bank of India (RBI) has decided to take the growing phenomenon of shadow banking head on.

After a meeting in Mumbai last Tuesday, the central bank has set up a 15-membered committee comprising officials of the RBI, Securities and Exchange Board of India (Sebi), Central Economic Intelligence Bureau and the National Housing Bank.

Confirming the development, RBI spokesperson Alpana Killawalla told HT: "An inter-regulatory group has been set up to monitor developments in the area of shadow banking under the chairmanship of RBI executive director P Vijaya Bhaskar."

Shadow banking refers to banking-like activity by non-banking finance companies (NBFCs) that remain outside the regulatory net. They generally operate as intermediaries between investors and borrowers.

"The committee’s role will be to find out the volume of money in shadow banks, who the investors are and direction of the money flow, etc. Also real estate dealings will be looked into very meticulously," a top official familiar with the development said.

Kolkata-based Saradha Group went bust this April after its flagship company Saradha Realty allegedly collected crores of rupees from over 10,00,000 small investors in West Bengal, Assam and Orissa and did not return the maturity value to investors nor paid salaries to its staff and instead closed down offices.

Parliament recently approved the Securities Laws (Amendment) Bill 2014, empowering Sebi with the authority to crack down on Ponzi schemes.

From Around the Web
Sponsored by Revcontent

also read

Sitharaman wants startups to give wishlist for policy support
Show comments

Steps to disable Ad Blocker on your browser


In order to serve content on our website, we rely on advertising revenue which helps us to ensure that we continue to serve high quality unbiased journalism. From our end, we will aim to show clean and unobtrusive ads to provide you with a great browsing experience.

Request to please follow the steps below and once done, please refresh your page.


For Chrome and Ad BlockPlus users

1.Press the ‘ABP’ icon in your toolbar at top right of this page

2. Click on ‘Enabled on this site’; this should now change to ‘Disabled on this site’


chrome



For Chrome and Ad Block users

1.Press the ‘AdBlock’ icon in your toolbar

2.Select the option ‘Don’t run on pages on this domain’ and then click ‘exclude’ on the pop up


chrome

Steps to disable Ad Blocker on your browser


In order to serve content on our website, we rely on advertising revenue which helps us to ensure that we continue to serve high quality unbiased journalism. From our end, we will aim to show clean and unobtrusive ads to provide you with a great browsing experience.

Request to please follow the steps below and once done, please refresh your page.


For Mozilla and AdBlock Plus (ABP) users

1.Press the ‘ABP’ icon in your toolbar

2.Select the option ‘Disable on hindustantimes.com’


chrome

Steps to disable Ad Blocker on your browser


In order to serve content on our website, we rely on advertising revenue which helps us to ensure that we continue to serve high quality unbiased journalism. From our end, we will aim to show clean and unobtrusive ads to provide you with a great browsing experience.

Request to please follow the steps below and once done, please refresh your page.


For Internet Explorer and AdBlock Plus users

1.Press the ‘AdBlock Plus’ icon in your status bar at the bottom of the screen

2.Select the option ‘Disable on hindustantimes.com’


chrome

Steps to disable Ad Blocker on your browser


In order to serve content on our website, we rely on advertising revenue which helps us to ensure that we continue to serve high quality unbiased journalism. From our end, we will aim to show clean and unobtrusive ads to provide you with a great browsing experience.

Request to please follow the steps below and once done, please refresh your page.


For Safari and AdBlock users

1.Press the ‘AdBlock’ icon in your toolbar

2.Select the option ‘Don't run pages on this domain’ and then click 'exclude'


chrome