It is learnt that the government may define the operations of these companies as a banking allied activity as they accept deposits on which interest is paid on an annual basis.

At present, most plantations have been classified as agricultural activity along with other agro-based activities such as floriculture and have hence been assigned code 019 under the National Industrial Classification (NIC) of the Central Statistical Organisation (CSO).

Sources in the Department of Company Affairs said that the government is planning to approach the CSO to assign new classification to the plantation companies accepting deposits.

Under the present system of classification, agriculture and agro-based activities are assigned codes beginning with "0" while banking and finance activities have been givencodes beginning with "8".

Sources further stated that plantation companies which do not accept deposits from the public would not be assigned new classification code. They are expected to continue with code 019.

Once the plantation companies are assigned new codes, they may be required to comply with the Reserve Bank of India regulations like any bank and non banking finance company. Consequently, RBI would be in a position to call for accounts and other documents of these companies. The DCA along with bodies such as the Securities and Exchange Board of India (Sebi) have been, in the last few weeks, considering various measures to bring the truant plantation companies to book. The DCA, Sebi and RBI have been receiving complaints from hapless investors who have lost their life's investment by certain plantation companies. Meanwhile, Sebi has asked DCA to initiate action against several plantation companies for specific violation of various sections of the Companies Act.

It has also asked the departmentto set up a special cell for plantation companies and exercise the powers under the Companies Act to verify the status of these companies.

Sebi had found that many of the plantation companies were basically deposit mobilising entities and that their income from plantation was fairly insignificant. These companies promised depositors very high returns of 30-40 per cent per annum, even though most of the deposit was invested in projects they were intended for.