Assam: Fraud Trading Firms Mushroom Despite Stringent Act in State

Staff Reporter

GUWAHATI: The Assam Protection of Interest of Depositors (in Financial Establishment) (Amendment) Act, 2013 has clearly spelled it out in no uncertain terms that the district commissioners should verify every aspect while issuing NOC (no-objection certificate) to start business of any sort in the state. A question that arises now is: how come there is mushroom growth of financial companies that are out to defraud people of their hard-earned money when a sharp-toothed Act is in operation in the state?

Clause 5A of the Act says, “Before starting operations in the state of Assam, every financial establishment shall intimate the deputy commissioner of the district about details of its business with supporting documents like permission of SEBI, RBI, or any other competent regulatory authorities of the central and state governments. A DC can issue the NOC to such an establishment only if he is satisfied with the documents furnished.”

Clause 5A © of the Act says that before giving NOC, DCs shall also obtain a report from the SPs to ascertain the genuineness of the persons associated with the financial establishments and their credentials.

Cause 5A(2) of the Act says that before starting operations in Assam, every financial establishment, including those operating online through the internet or any other electronic media, shall obtain a trade license from the competent authority. The clause further says that no local authority can issue a trade license in the absence of an NOC from the DC.

Clause 5A(4) of the Act says that every financial establishment shall file a monthly statement along with a copy of the periodical statement that is filed with the SEBI or RBI or any other competent regulatory authority of the government about its business transactions in that local area.

Clause 5A (9) of the Act says that if the DC smells a rat on any form of misleading or cheating depositors, he can restrain the establishment from operating in that area, freeze its bank account, and restrain it from selling, transferring, or altering any of its movable or immovable property.

Despite the operation of such an Act with adequate teeth, how come there is mushroom growth of illegal trading companies in the districts in Assam? The authorities came to the scene only when a large number of depositors had lost crores of their hard-earned money. 

  Also Read: Assam: Another Woman Absconds With Rs 100 Crore In Online Trading Scam (sentinelassam.com)

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