While the demonetisation was widely criticised it did help in shining some light on more than a few shadow firms that were under the radar, or so we think. The changing of notes has made many such companies and firms to come forward to deposit and withdraw currency on the double.
Even though it has been one year after the announcement the actual data of monetary transactions are still sketchy but more than 17,000 crore was deposited and withdrawn post-demonetisation; by around 35,000 companies.
In a report by Registrar of Companies the officials said that they were able to strike–off about 2.24 lakh companies which had remained inactive over a period of two years. Restrictions were also imposed for such firms on the operation of their bank accounts and financial transactions.
In a press release by the Corporate Affairs Ministry said that the Director, Additional Director or Assistant Director of the Serious Fraud Investigation Office (SFIO) had been authorised to arrest anybody if a suspected financial fraud is detected, that is punishable under the law.
Further steps are under way to set up the National Financial Reporting Authority (NFRA), an independent body that would test-check financial statements, prescribe accounting standards and take disciplinary action against errant professionals.
The report also said that an ‘Early Warning System’, developed using state-of-the-art software applications, will be housed in SFIO. The key aim of this system will be to strengthen the regulatory mechanism and keep things under a careful scanner for the future.
As per the information received from 56 banks around the nation about of 35,000 companies and 58,000 accounts were noted. More than 17,000 crore was deposited and withdrawn post-demonetisation, according to the report.