Beware! Transactions With These 9500 Financial Institutions Is ‘Highly Risky’

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NBFC is defined as a company registered under the Companies Act which is engaged in the business of loans and advances, acquisition of shares, stocks, bonds, debentures issued by the government or other marketable securities.

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NBFCs offer most sorts of banking services, such as loans and credit facilities, private education funding, retirement planning, trading in money markets, underwriting stocks and shares, TFCs and other obligations.

Punjab National Bank Rs 11,400-crore scam, probably one of the largest in India’s banking history. Part of the blame may lie with the government itself, particularly the finance ministry, which is why Financial companies are taking every crucial step to retain the safety of people.

When the scam came out in the open, many of the PNB bank’s high-profile executives also quit the board. According to the reports, it has been claimed that it is not like that the bank’s audit committee was not aware of how weak its audit and fraud detection systems are.

In the wake of this scam, government, therefore, has released a list of nearly 9500 Non-banking financial companies, all of them categorised with ‘high risk’. The list was released by FIU-India on its official website which clearly shows the names of those NBFCs mentioned in the list.

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The reason why they are listed ‘Risky’ is due to the fact that they were found non-compliant to the Prevention of Money Laundering Act rules. Basically, the reason these financial institutions were mentioned in the list is that they did not comply with the condition of appointing a principal officer who is responsible to check and report suspicious transactions and cash transactions of Rs. 10 lakh and above and report it to the agency.

The list containing the names of the firms has been updated till January this year. Click the link to see the entire list of names of these 9500 ‘high-risk financial institutions’.

Under section 13 of the PML Act imposed by FIU-IND will regulate the fine on any banking company, financial institution or intermediary that will fail to comply with the obligations of maintenance of records, furnishing the crucial information and also the verifying the identity of their clients.

The imposed fine will include both administrative action and also a monetary fine. The monetary fine may vary between Rs 10,000 and Rs 1 lakh.
The primary purpose of FIU giving the list of names is to make aware the public that these NBFCs are not law compliant and that people should refrain from indulging into transactions with any of these non-banking financial companies.

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