West Bengal adopts Bill to tackle illegal activities of Chit Funds

December 19, 2013

With a view to tackle illegal activities of Chit Funds, the West Bengal Assembly adopted a fresh Bill ‘West Bengal Protection of Interest of Depositors in Financial Establishments Bill, 2013′.
The bill has arrived close on the heels of Sardha Chit Fund Scam which swindled the investors of their money.
Under the provisions of the new Bill personal properties of a person, who has borrowed money from defaulting Chit Fund Company will be attached besides, the properties of the owner, partners, directors and employees of the Financial Institutions will also be impounded.
As per State Finance Minister, the Government has returned money to 2 lakhs 87 thousand people thus far, who have been cheated by the Sardha Group. The Government has spent 165 crore rupees for this purpose till now.
There are vociferous demands for CBI investigations into the case and recompense the duped investors by selling of the properties of those who were involved in the scam.

What happened in Sardha Chit Fund Scam?

The Saradha Chit Fund Scam is a financial scam that was caused by the collapse of a Ponzi scheme run by Saradha Group, a syndicate of Indian firms that was thought to be operating a wide range of collective investment schemes in Eastern India. The group crumbled in April 2013, inflicting an estimated loss of Rs. 200–300 billion (US$4–6 billion)to over 1.7 million depositors.The state government of West Bengal set up an inquiry commission to investigate the collapseand also set up a fund of Rs. 5 billion ($92 million) to ensure that low-income investors are not bankrupted. The Union Government through the Income Tax Department also launched a multi-agency investigation along with the CBI to probe the Saradha scam, as well as other similar Ponzi schemes.

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