Lok Sabha Debates
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Monday, March 11, 1968 1R Fourth Series .20 Phalguna 21, 1889 (Saka) /2.6$%+$ '(%$7(6 Fourth Session Fourth/RN6DEKD /2.6$%+$6(&5(7$5,$7 New Delhi Rs:1.00 CONTENTS No. 20-Monda)', March II, 1968/P"alguna 21, 1889 (SAKA) Oral Answers to Questions- COLUMNS -Starred Questions Nos. 540, 541, 543,545,546,550,553 and 554. 2685-2718 Short Notice Question No.6. 2718-24 Written Answers to Questions- Starred Qucstions Nos. 542, 544, 547 to 549, 551, 552 and 555 to 568 2724-38 Unstarred Questions Nos. 3401 to 3438, 3440 to 3515. 3517 to 3518, 3520 to 3543, 3545 to 3611 and 3614 to 3636 2738-2908 Calling Attention to Mattcr of Urgent Public Importancc- Constitutional Crisis in Punjab 2908-15 Papers Laid on the Table . 2915-18 Joint Committee on offices of Profit- Second Report 2918 Statement re: Railway Accident on the South Central Railway 2918-19 Shri Pari mal Ghosh 2918-19 G~."..1 Budget-Gcneral Discussion . 2919-3061 . ~i K. N. Pandey . , 2920-24 ~hri Kanwar Lal Gupta . 2924-46 Shrimati Sucheta Kripalani 2946-54 Shri Bhogendra jha 2954-68 Shri N. K. P. Salve 2968-77 Shri Humllyun T< ~ 1-'. t 2978-90 (al·\vii.. ~her dIaIJ ,1, 2990-98 ment bas becn . Sarma 2999-3004 swindling b.mrit Nahata 3005-16 Pund .'))fri Rane . 3016-21 Shri Gulam Mohammad Bakshi 3021-48 Shri Randhir Singh 3048-54 Sbri Y. S. Kushwah 3054-61 Dr. Melkotc 3061 Correction of Answer to S. Q. No. I I I reo Study of Hindi in Schools in Madras 3061 Half-An-Hour Discussion reo study of Hindi in Schools in Madras 3062-76 Shri Shiv Kumar Shastri 3062-66 Dr. Triguna Sen. 3071-75 -The sign -~ marked above the name of a Me~be--;: i~dicate~tiWth~ question was actually asked on the floor of the House by that Member. WK SABHA DEBATES 1685 2686 LOK SABHA gated and taken necessary action in the matter. Monday, March 11, 19681PhaigufUl 21, 1889 (Saka) (c) As regards the non-banking finan- cial companies, a gist of directions issued hy the reserve Bank regulating their The Lok Sabha met at Eleven of the husiness is laid on the Table of the Clock. House. These are likely to improve the operation of these companies in the [MR. SPEAKER in the Chair] long run. As for chit funds, there arc special enactments in. force in Ker;tla. ORAL ANSWERS TO QUESTIONS Madras and Delhi where they are rela- tively pouplar. FINANCE AND C'HITFUND COMPANIES Statement + (i) The direction is applicable to all ·540. SHRI UMANATH: financial companies, whether or nO: SHRI VISWANATHA they accept deposits from public, "iz. MENON: loan companies, hire purchase finance SHRI P. GOPALAN : companies, housing finance companies, DR. RANEN SEN: investment compan.ies, miscellaneou. finance companies. chit fund companies. Will the Minister of FINANCE he Nidhis and mutual benefit finance com- pleased to state : pan.ies. [Insurance companies and stock exchanges and companies carrying on ("a) whether the attention of Govern- mainly the business of brokers or job- ment has been drawn to the large scale hers are excluded.] swindling by Finance Companies, Chit Fund Companies and housing colonizers; (ii) In the case of a hire purchase or a housing finance company, it wilI be re. (b) if so, whether Government have quired to (a) maintain in cash or cur- investigated the matter; and rent accoun.ts with scheduled banks or (c) the steps taken by Govcrnment In unencumbered or other trusliee iSC- to stop this evil ? curilies, an amount equal to 10% of the outstanding deposits; and (b) collect it~ debts in a way 'Such that the aggregate THE MINISTER OF STATE IN recei~ by way of instalmen.ts. due to THE MINISTRY OF FINANCE the companies under hire purhcase con. (SHRI K. C. PANT): (a) Certain tracts, during each of the two half years complaints regarding non-repayment of shall not be less than 25% of the deposits and similar liabilities have heen amount outstanding under such contracts received mostly from the Delhi region. as on the close of business on the last working day of the previous financial (b) These relate primarily to matters year. which are of a contractual nature and the normal relMdy for the affected par- (iii) No non-banking financial com- ties would lie in civil proceedings. How- pany shall accept deposits repayable 00 ever, whenever caned for, the 3J'pro- demand or ootice or after a period of priate ~ttr autborities have investi. less than twelve month. (six mont'" for 2687 Oral Answers MARCH 11, 1968 0/'01 Answel's 2688 hire purchase and housing finance com- SHRI K. C. PANT: This is one Jf panies). those matters which are constantly under (iv) No noo.-banking financial com- reveiew. So far as the persons who pany (other than hire purchase and became victims of these companies are housing finance companies) shall accept concerned. I think it is a sufficient warn- deposits in excess of 25 % of ~: paid-up ing to them that so many companies capital and free reserves. have failed and duped J'l'lple. They should take a warning from this very (v) No non-banking financial company fact. So far as the laws in this respect ,hall issue an advenisement soliciting are concerned. they arc certainly under deposits, unless such advertisement car- review and even now certain proposah rielS necessary details regardin.g the com- are under consideration. pany, such as its nature, business, profits for the la!lt financial years, paid up SHRI UMANATH: Does Govern- capital, reserves and similar pal11iculars. ment propse any new legislation '0 De (vi) Every non-banking financial COm- hrought wilth a view to protecting these pany shall furnish to every depositor a victims on the basis of the review which receipt for every amount which has been the hon. Minister said he has under- received by the company and the com- taken already? pany shall keep registers giving full particulars of each deposit. SHRI K. C. PANT: It is a little pre· maoturc to say precisely what would he (vii) The report of the Board 0f done. but it is heing examined. Directors of the company should, among other things, contain particulars of in- DR. RANEN SEN: Taking advan- formation regarding (a) total number of tage of the poverty of the common peo- depositors of the compan.y whose de- ple these ch~t fund companies and hous- posits have not been claimed by the de- ing financial companies are growing like positors or paid by the company after mushrooms almost everywhere in India. it has become due for renewal (b) ,the In spite of certain precautions taken by amounts remaining unclaimed or unpaid the Reserve Bank as laid down in tbe heyond the due dates. statement. these companies arc growing (viii) Intcrest on deposits repaid pre· and more and more people are being maturely will be at rates prescribed by trapped in their clutches. May I Know the Reserve Bank. how many cases have been launched against such companies and how many people have been prosecuted under the SHRI UMANATH: Notwithstanding existing directives and laws that .lre pre- the various legislations, acts and other valent today in India? thingo;; which the hon. Minister said arc in force in various States. many citizens SHRI K. C. PANT: Apan from the are being deceived by these chit fund directives to which the hon. member re- companies and otlier institutions. For ferred. there is the Madras Chit Fund Act examples. they ask for a loan of which has been extended to cover Delhi Rs. 20.000 from a financial company and also and under this Act there arc various then the man would Dot be seen at all. provisions to control the functioning of Ikcause most of the people involved in these companies. I could mention one this are middle-class and lower class or two of those provisions. One is. no people, who are taking loans for building action or drawing in respect of auy chit houses and other things and they are the will be permitlted unless the chit has main sufferers. I would like to know heen registered with the Registrar of whether Government have reviewed the Chit Funds. Secondly. the firms win working of these various' institutions. and have to execute an indenture of mort- I would also like to know how many gage of trust in favour of the ei~trar people have suffered on account of this of Trustees providing by way of gecuri:y and whether the present legislations and property equal in value to the aggregate acts a'e sufficient for protecting these valoe of the amount subscribed initially people? in one instalment. Then. the foreman 2689 O,aI A. nswer.< PHALGUNA 21, 1889 (SAKA) Oral A'l.<lI'er. 2690 will be entitled to collect payments due may say that in all these cases the com- and a commission not exceeding 5 per pany law administration and the Re- cent of the chit amount and so on. The serve Bank of India pass on tbeir report,; chit may be wound up under the direc· to the police and if the police find that tion of the district court if it is nN be- there is a case of criminal misappropri- ing satisfactorily conducted. These are ation involved, they will take action. some of ,the other regulations that apply. Apart from this. only recently. on the "iT llilro'mf l!tff : ~ itlJ oT 15th December 1967. a detailed list (If Cf'fi'fT t ...