Regulators and law enforcement agencies need to deal with fly-by-night operators who dupe people by promising a large sum of money in exchange of a small fee, RBI governor Raghuram Rajan said on Thursday.
Launching the portal — sachet.rbi.org.in — which will help people obtain information about entities allowed to collect deposits, the governor said that fly-by-night operators who don’t intent to repay can promise the moon and if the public don’t know better, they could be fooled into investing into some of these enterprises.
He explained that unfortunately, some of them don’t fall within the ambit of any specific regulator, some of them are very small and are in hard to reach areas and some of them even if they fall within the ambit of a specific regulator and the regulator start taking action, are morphed into something else.
“So it is very important to bring all the regulators together but also bring them together with the law enforcement agencies who see on daily basis in their town or village what is going on, who is accepting unauthorised deposits, who is promising the moon,” he said. Rajan added that he usually receives five to six emails every day from people who have sent money and found they have lost out.
According to the governor, regulators and other law enforcement agencies need to intervene before the fly-by-night operator runs away with the money. “We have to stop the crime in progress and that is why the State Level Coordination Committee (SLCC) is very important because, combined with the protection of Depositors Protection Act, it gives the regulatory authorities and the law enforcement agencies the ability to intervene before the money has actually been taken away and misused,” he added.
Raghuram Rajan said it is very important to know who is duping people, to know the operators who are misusing the public’s faith and for that market intelligence is required.
“We need information from the public and that is why this website becomes important because this gives the public the ability to send information directly to the regulators,” he said, adding that there is a large segment of society which is not connected to the internet but that is going to be diminish overtime. “It is very important to protect the public money,” Rajan noted.