Money Changers Demand Better Deal
A meeting of full fledged money changers (FFMCs)in Mumbai, under the auspices of Money Changers Association of India (MCAI), was held on Wednesday to protest against what they claimed harassment by the investigating agencies and discussed the draft resolution of the association.
Chairing the meeting, Wall Street Finance Ltd (WSFL) chairman Asgar Patel said that the money changers deal with authorised dealers holding an Reserve Bank of India (RBI) licence to operate.
"Once the deal is over, there is no way to check how much money has been used by these dealers," he said adding that the Directorate of Revenue Intelligence (DRI)officials harass them by freezing bank accounts and travellers' cheques.
According to the money changers, there is interference by DRI and Foreign Exchange Regulation Act (Fera) officials into their day-to-day functioning.
Money changers complain that these agencies visit the offices of FFMCs and after completing their investigations, summon executives and operating people, which affects their business. They are also aggrieved over the fact that the investigating agencies give a press release naming FFMCs dealt with, without mentioning that they do their business within the framework of RBI guidelines and other operating laws of the country. They claim that this discourages banks to deal with them.
All this leads to the banks freezing their accounts or stopping payments against demand drafts, resulting in working capital being stuck. Patel said that MCAI would make representations to the DRI and finance ministry. To start with, the association will have seven members as subscribers and be registered as a company. The association plans to move to the court and has asked members to provide details of their cases to enable the association to prepare a petition.
The participants at the meeting were of the opinion that DRI and Fera clearance should be sought before the apex bank decides to give licences. According to them, this would ensure the company before getting the licence has the clearance of all the three controlling authorities.
According to Parag Mehta of WSFL, the RBI is still to come out with a norm for FFMCs and restricted money changers (RMCs) to apply for authorised dealers licences.