Odisha CM seeks Prez nod on Bill to curb frauds

With incidents of embezzlement of public money by unscrupulous financial entities on the rise in the state, Chief Minister Naveen Patnaik has sought quick Presidential assent for a Bill passed in the assembly for protection of the interest of small depositors.

The Bill - Odisha Protection of Interests of Depositors (in Financial Establishment) - 2011 after obtaining the Presidential assent will enable the state to initiate punitive action against the offenders.

"The afore mentioned Bill contains extensive safeguards for protecting the small investors from the malpractices of fraudulent financial entities. In view of the urgency, I am drawing your personal attention for expediting the Presidential assent to the Bill so that we can firmly and effectively deal with the frauds being perpetrated by unscrupulous financial establishments," Patnaik wrote in his letter to Union home minister, Sushil Kumar Shinde.

The Bill was passed in the assembly in December 2011. The state government had then sent it to the central home ministry on April 3, 2012, for securing President's assent. The Union home ministry, after due examination and inter-ministerial consultation, had sought some clarification in December, 2012. Accordingly, the state government had submitted its compliance on April 2 this year.

In his letter to Shinde, the chief minister expressed concern over fly-by-night operators taking advantage of the prevailing regulatory weaknesses and gaps to lure the unsuspecting public by promising them unrealistic returns on their investments.

After the Saradha chit fund row, the state crime branch launched a probe into the company's money trail and sealed its offices at Balasore and Puri. The crime branch had also conducted a massive crackdown earlier this month on 150 offices of non-banking financial companies (NBFCs) in 15 districts. The drive was meant to verify authenticity of their businesses, approvals from Reserve Bank of India (RBI) and Securities & Exchange Board of India (Sebi) and volume of investment as well as depositors amid large scale fraud.

Of late, Pradeep Sethi, chairman of city-based Artha Tatwa Group was nabbed and remanded to judicial custody on charges of duping small investors across different parts of the state.

So far, the crime branch has registered cheating and money laundering cases against nearly 60 NBFCs in the state in the last two years.

Lately, there have been rampant incidents of some unscrupulous financial establishments and fly-by-night operators duping people, especially in small towns through chit funds, multi-level marketing schemes and collecting investment schemes. The frequency of such cases of fraudulent deals have been particularly high in Balasore in the state's northern belt bordering West Bengal, where people have been more vulnerable to schemes offered to them in the guise of profitable investment.