Legal action against 11 'financial' companies

The Central Bank has filed legal action against 11 fraudulent investment companies which had obtained million of rupees in deposits pledging unrealistic interest rates.

Some investment companies had pledged a monthly interest of Rs. 6,000 per Rs. 100,000 which is allegedly paid only in the first few months, said a spokesman for Non Bank Financial Institution (NBFI) Central Bank.

Some of the companies or human development banks had registered under the Company Registra's Department or Regional Cooperative Commissioner's Department.

He said that the Central Bank has the authority to take action against such fraudulent under the Finance Companies Act.

Fourteen companies whose names were published in the newspapers for carrying out business contravening the provisions of the Finance Act Companies, Act No. 78 of 1988 are being scrutinised following complaints made by impressionable investors, he said. The Central Bank has made known the names of licensed commercial banks, registered finance companies and licensed specialised banks in the national newspapers.

(LSAW)