FOSTTA Mandates Agent Details To Curb Textile Trade Frauds, FISME Calls For Public Database

(MENAFN- KNN India) Surat, Mar 29 (KNN) In a bid to prevent frauds related to non-payment for textile goods after purchase, the Federation of Surat Trade and Textile Association (FOSTTA) has introduced a standard operating procedure (SOP) that mandates agents to submit their complete details to traders before entering into transactions.

The move aims to enhance transparency and accountability in Surat's bustling textile markets, known to be one of the largest in India. Under the new SOP, FOSTTA has issued a form to traders, which agents are required to fill in with their personal and business details.

Prashant Patel, President of the Federation of Indian Micro and Small & Medium Enterprises (FISME), highlighted that fraudulent activities in the textile market, often involving brokers, have been a longstanding issue.

He stated, "Such frauds have been prevalent in the textile market for a considerable period of time, with a significant number of these frauds occurring when a broker is involved."

Patel suggested that the database derived from the forms completed by agents should be made publicly accessible to aid in identifying individuals engaged in fraudulent practices.

"The database obtained from the forms filled by the agents should be channelized into the public domain, facilitating the tracing of individuals who perpetrate such frauds," he added.

However, he acknowledged the potential legal complexities associated with this approach, cautioning, "There may be some legal implications in doing so."

Emphasising the need for a comprehensive strategy, Patel further recommended, "There should be a dedicated legal team to address and counter these issues as well."

The inclusion of Patel's remarks highlights the potential benefits of making the agent database public, as it could aid in tracking down individuals involved in fraudulent activities. At the same time, it underscores the need for careful consideration of legal implications before implementing such a measure.

The introduction of the SOP comes in the wake of a rough estimate that suggests frauds amounting to over Rs 800 crore have taken place in Surat's textile market in a year.

In most cases, the buying party disappears without making payment, taking advantage of the 180-day payment period by continuing to purchase goods for four to five months before vanishing.

FOSTTA has handled many such cases in the recent past and found instances where traders and agents were negligent in verifying the background of the buyer party, leading to disputes.

Under the form, agents are required to provide details such as their name, firm's name, contact numbers, office and residential address, native place, GST number, Aadhaar number, PAN number, and bank details, enabling traders to conduct thorough background checks before engaging in business transactions.

Failure to comply with this requirement will result in FOSTTA denying assistance to the trader through mediation or legal means for recovering payment in case of disputes.

(KNN Bureau)


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