The FIU of finance minister has categorized nearly 9,500 non-bank financial institutions in India vulnerable to ‘high risk’ as the companies are non-compliant with a predefined clause of anti-money laundering. FIU published a list of high risk financial companies that includes 9,491 names. FIU is responsible for checking crimes in the economy of India that works under the supervision of Ministry of Finance. It also alerts administering entities against such cases.
Under PMLA, the non-bank financial companies, which comprise of cooperative banks, are needed to provide details regarding their financial transactions and operations to the Finance Intelligence Unit.
When these companies’ data were processed by FIU, it was found that they didn’t obey on one predefined provision of appointing a chief official who would be accountable for checking and reporting mistrustful transactions and cash operation of Rupees 10 lakhs or more to the agency.
The actions and behavior of these companies post demonetization of Rupees 1,000 and Rs. 500 in the year 2016, November were scanned by FIU and after thorough evaluation from a number of sources; it declared the list of the institutions.
The announcement of the list is basically a measure by FIU to spread awareness among general public that these non-bank finance companies are not obeying law and public should avoid business or any sort of financial transaction with them, as per a FIU’s senior officer
Non-Bank Financial Company are those which are compliant to Company Act registration and involve in share acquisitions, advances and loans, debentures, bonds, stocks and securities from the government or profitable securities or local power.
Non-Bank Financial Companies provide loans and make investments. Hence, their actions are similar to banks. However, demand deposits cannot be accepted in NBFC and is not considered a segment of the settlement system and payment; it can’t issue cheques that are drawn upon it.