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RBI sets up intelligence units to contain scams

The Reserve Bank of India has set up market intelligence units in 16 of its 19 regional offices. This move is expected to help the central bank to combat what id called shadow banking as the intelligence units are tasked to collect information on such activities. These units will work under the non-banking supervision divisions of at the central office of RBI and will specifically target the non-regulated financial activities. The move is said to be the regulator’s response to the recent incidents of chit schemes like those offered by Saradha cheating the public and going bust. RBI describes shadow banking as the banking like activity by NBFCs, which are essentially outside the purview of the regulatory framework. There have been instances in the recent past of several NBFCs defrauding investors in the name of plantations and pyramid formations.

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