WEST Bengal Small Savings Development Officers Association,an organisation of block-level small savings officers in the government,will file a public interest litigation in Calcuta High Court next month with a request to shut the shops of chit fund managers in the state.
This amid the sudden closure of various subsidiaries by Saradha Group of companies that left many people jobless and forced the government to launch a manhunt to arrest the managing director of the group,Sudipta Sen,for alleged money laundering.
I filed an RTI query with the Reserve Bank of India which informed me that from April 1,2008 to January,2013 no organisation in West Bengal has been given permission to accept deposits from the public. But as per our reports as many as 4,000 chit funds firms are collecting money from general public, Nabakumar Das,president of the association,told The Indian Express.
The association on Friday submitted a memorandum to Chief Minister Mamata Banerjee and Finance Minister Amit Mitra seeking action against these companies.
The Indian Express has accessed government records that have showed how small savings from the state that enables the government to borrow from the Centre plummeted over the last four years mainly due to mushrooming of chit fund companies in the state. For example,in 2009-2010 gross collection of small savings was about Rs 30,171 crore; in the next financial year of 2010-2011 the collection increased to 33,251 crore. But during 2011-12,the collection dipped to Rs 25,388 crore and during from April to December,2012,the collection further plummetted to Rs 18,071 crore.
But the real problem is during the last two financial years more money was taken away by depositors than saved and thus the state government does not get any scope to borrow funds from the Centre.
Simply speaking,you can not borrow money from banks and financial institutions if in one year more money is taken out by depositors than what small savings they have made in that particular year. This leaves the state government in a tight spot, an official of the state government said.
The officials also referred to the Prize Chits and Money Circulation Schemes Act enacted by Parliament in 1978 that prohibits chit fund operations. What happened to this law? What is RBI doing? the official questioned.