The Reserve Bank of India’s (RBI) reluctance to let non-banking financial entities accept public deposits has put a question mark on the savings scheme West Bengal chief minister Mamata Banerjee had announced on May 9.
The West Bengal government too is aware of the hurdles in launching the investment scheme that was proposed after the ponzi bubble burst to expose the Saradha Group and other deposit collecting firms.
Banerjee had said the drafting of the savings scheme would begin a month after the announcement. But work on the draft is yet to start, state finance department officials said.
They cited two reasons. “First, RBI has no intention to allow any non-banking entity to venture into deposit raising schemes. Secondly, the suggestions that we received on the scheme were largely negative with experts challenging its viability,” a finance officer said.
RBI governor D Subbarao had in a recent statement advocated a gradual end to deposit collection by non-banking entities.
“Only banking entities, which operate under a highly regulated system, would continue to be in deposit-mobilisation business in future,” he said.
Clarifying the statement, a senior RBI officer from Mumbai said the central bank would not make the existing non-banking entities go out of businessovernight. “But fresh applications from new entities would not be entertained,” he said.