RBI sets up M I units to fight ponzis

New Delhi:In a move geared to combat shadow banking through increased vigilance and intelligence gathering, the Reserve Bank of India (RBI) in a recent organisational revamp, has set up market intelligence (MI) units across 16 out of 19 regional offices across the country.

“In order to gather intelligence on fraudulent individuals and companies, the RBI has recently set up MI units across India in 16 regional offices under the non-banking supervision divisions of RBI’s central office,” said a top official on condition of anonymity. “The latest effort is to address the pockets of non-regulated financial activities often camouflaged and hybrid that go unnoticed.”

The new development comes in the aftermath of several ponzi-like schemes including the Saradha financial scam that have fleeced the public in recent years resulting in an increasing clamour for a stronger role on part of the RBI.

Shadow banking is the banking-like activity by non-banking finance companies (NBFC), which remain outside the regulatory framework. They operate as intermediaries between investors and the borrowers, providing much-needed liquidity in the system.

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