Pilot writes to states for action against frauds.
No state government has enacted the model rules circulated by the finance ministry to ban chit funds,despite the lapse of six months. The rules are meant to coordinate penal action across India against promoters of Ponzi schemes,but it has not been acted upon. Corporate affairs minister Sachin Pilot told Parliament on Monday that he has sent reminders to the state chief ministers to get going on the subject.
The minister was responding to the allegations made against several primarily West Bengal based money circulation schemes that have collapsed recently. Of these the most prominent one is allegedly Saradha Group. However,state chief minister Mamata Banerjee claimed it is the Centres responsibility to fix the problem.
The Prize Chits and Money Circulation Schemes (Banning) Act 1978 is a Central act but since the issues fall under the purview of states it is administered by them. She also announced an inquiry and a SIT probe into the collapse of chit fund company.
Banerjee claimed her government has asked the Centre to approve a bill on the subject forwarded by the former Left Front government in the state in 2009. If it is returned within 24 hours,then our government will immediately promulgate the ordinance to that effect, she said. According to her the bill that the Left Front government had proposed had flaws which allowed the chit fund business to mushroom.
One of the key employees of Saradha Group till last year is now a Rajya Sabha MP from her party,Kunal Ghosh.
In New Delhi,Pilot said the Centre will pitch for heavier surveillance through the RBI along with awareness campaigns for spreading public awareness about such fraudulent entities through bulk SMSes,TV tickers and messages on post office passbooks. A joint campaign with market regulator Sebi is also being explored,he said.
After the case of alleged fraud by Singapore-based SpeakAsia Online,the government started the process of reining in companies which offered impossibly high returns in a short span or offered huge benefits for enrolling more subscribers.
The ministry of corporate affairs has started programmes to spread awareness on fraudulent entities through SMS,TV and Post Office passbooks
A joint campaign with the Securities and Exchange Board of India is also being explored
A letter has also been written to finance minister P Chidambaram asking for increasing surveillance by the RBI over unauthorised non-banking finance companies