He called for the group's formation because he said people had a fundamental and human right to defend themselves if the Government could not do so.
Panday, who was addressing a UNC-A public meeting in Chase Village, Chaguanas, on Monday night, said Bounty Hunters Inc would not only "be simple but legal".
He said 40 businessmen could put up $500,000 each and create a fund of $20 million "and let the criminals know that, should they attack one of you, we shall use that money to hunt them down and bring them to justice".
Panday, who recently returned from England, said he had a chance to view what was happening in Trinidad from the outside and realised the people's frustration.
"When the people accept violence and will not stand up and fight against it, they living in a failed state. When the state fails to perform its primary function, which is the protection of the property of citizens, then the people come to a point where they must defend themselves," he said.
He referred to a visit to the home of a family in Felicity, who claimed that in the absence of the businessman husband, the wife and children were attacked, beaten, robbed and assaulted "by men dressed in TSTT clothes and in a marked TSTT van".
"My information is that the police intercepted a TSTT vehicle on the highway and questioned the occupants, then sent them away, without even asking that they be identified by the victims," he said , adding the men did not wear masks during the attack and could have been identified.
Panday said before he reached home that night, he heard that another businessman was shot dead by bandits.
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