It failed to take timely action against fraudsters, says Maanam

Chairman of Visakhapatnam Cooperative Bank and former MLA Maanam Anjaneyulu has attributed the proliferation of ‘fly by night’ finance companies to the indifference of the government towards the credit needs of small investors and its inability to initiate timely action against such companies.

The Communist Party of India (CPI) has complained to Police Commissioner B. Shivadhar Reddy against Akshaya Gold, which has allegedly stopped repaying matured deposits since last April. The company was given time till March 30 to clear the claims but the management failed to do so.

Addressing a media conference in this connection along with CPI district secretary J.V. Satyaranayana Murthy here on Tuesday, Mr. Anjaneyulu said at a time when the Centre and the RBI were talking of financial inclusion the common man was unable to approach the public sector banks, which were concentrating more on high value customers.

He said in the last few months about half-a-dozen unscrupulous finance companies had downed shutters in Visakhapatnam resulting in several families going bankrupt. He said the government, which was spending crores of rupees in containing Left-wing extremism, should concentrate more in containing financial frauds that were ruining thousands of families in the country.

People were losing faith in financial institutions and if the trend continued, it could spell doom for the economy of the country, he said.

Mr. Murthy said the companies were devising ingenious ways like promise of land and collection of instalments towards plots to avoid coming under the purview of the NBFC guidelines. He said Akshaya Gold, which has its corporate office in the city, has collected the maximum number of deposits in Telangana and Rayalaseema. The company management was showing the freezing of its assets in Ongole and Visakhapatnam as an excuse to stop repayment to the depositors.

The CPI leaders said such frauds could be checked when banks give reasonable rate of interest to small depositors, police keep a tab on prospective fly-by-night operators and prompt action was initiated against the fraudsters.

CPI leader Ch. Raghavendra Rao was present.

More In: Visakhapatnam