Odisha forms panel to check financial fraud

Amid growing instances of unscrupulous financial establishments defalcating savings of common citizens in Odisha, the state government has decided to form a coordination committee to stem the rot.

The panel, to be headed by finance secretary J K Mohapatra, is aimed at strengthening regulatory and supervisory cooperation among the agencies of the Central government and the state government for curbing the activities of such unscrupulous financial establishments. The committee will also help protect the interests of small depositors in the state.

The panel will have secretary (home), additional director general (police), registrar of companies (Odisha), registrar of cooperative societies (Odisha) and representative of Securities and Exchange Board of India (Sebi) as members.

 

The decision to form the committee is taken as per the advice of the Department of Financial Services under Union finance ministry.

The committee would seek participation of other officials of the agencies of Central and state governments as special invitees as and when necessary. It will meet at least once in a quarter for carrying out its mandate.

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 where people have been more vulnerable to schemes offered to them in the guise of profitable investment.

The finance department has felt that such unscrupulous individuals and entities take advantage of the loopholes in the existing legal provisions and the lack of clarity in roles of different agencies such as Union ministry of corporate affairs, Reserve Bank of India (RBI), Sebi and other agencies of Central and state governments.

In the absence of regulatory and supervisory cooperation between Central and state agencies, such entities mobilize large sums of money through fake schemes.