In the wake of growing menace of un-authorized deposit raising schemes and scams such as Saradha and PACL, RBI Deputy Governor R Gandhi on Monday underscored the need for redefining the term called ‘deposit’. He noted that though the definition was clear in case of banks, but did not cover money collected by other entities, for which the exercise was being carried out by RBI in association with the government.
He also highlighted the need for defining the term ‘deposits’ in way which would make it implicit as to who would be the regulator for different types of collection of money. He further noted that amendments would have to be made in the laws once the re-definitions would be completed. Additionally, he also pressed the need to strengthen state-level coordination committees so that un-authorized deposit taking could be dealt-with in a better way.
Notably, the comments from Gandhi come within days of capital markets regulator Securities and Exchange Board of India (SEBI) directing PACL, Delhi-based property developer, to return Rs 49,100 crore to depositors, and after the busting of earlier scams like the one caused by the Saradha Group in West Bengal and two Sahara Group companies.
Further, on the development of ‘newly revised norms on liquidity management’, the deputy governor asserted that this framework was aimed at reducing the volatility in the overnight rates and would have a positive impact in terms of predictability and timing.