The Saradha chit fund fraud has brought to light the dark side of the unorganised investment sector (“Cheat funds, again,” April 26). Despite advertisements by governments warning the public not to invest in dubious ventures that promise the sky, people pour their hard-earned money into chit funds. That high returns are associated with high risks is the basic law of economics. If their risk pays, people consider themselves lucky; if not, they blame the government.
We have post offices in every village and tehsil. Though they do not promise high rates of interest, your investment is safe. Mamata Banerjee is planning to buy peace by compensating the investors from a fund of Rs 500 crore but she has no right to use the taxpayers’ money in this manner.
Deepjot Singh Thukral
This is not the first time that thousands of investors have been cheated of their hard earned money. They will keep getting cheated unless they are educated on how to manage their finances. Instead of indulging in a blame-game with other political parties, Ms Banerjee should ensure that the duped investors get back their money.
That said, the unending speculation in the media on whether the Trinamool Congress’ popular support in rural Bengal will collapse like the Saradha chit fund is over the top.
The mushrooming of chit fund companies — some of them without the permission of the RBI and SEBI — has a long history in West Bengal. How to get the money back from a collapsed fund is a difficult question. Confiscating the fund owner’s property is not easy under the law. Also freezing the bank deposits and sale of the confiscated property will take time. Ms Banerjee has done the right thing by setting aside Rs 500 crore to compensate the Saradha Group investors.
Chit fund frauds are part and parcel of problems faced by those who invest in bogus schemes, hoping to get high returns. Both the Centre and the State governments are equally responsible for big lapses involving public money.
Despite constant feedback and articles written in financial newspapers of chit funds being cheat funds, people get trapped in false schemes. Many even invest their terminal benefits after retirement in them.
Jayanthy C.K.S. Maniam,
Chit fund companies and scams are inseparable. The companies breed a parallel economy. Why do investors crave for more than reasonable returns on their investments? Do we need chit fund companies at all? How can a nation that promotes ‘cheat fund’ companies fight black money?
In many instances, economic offenders enjoy the backing of politicians and officials of regulatory agencies. Financial illiteracy is the sole cause of recurring frauds of this nature. The media need to play a vital role in educating our people.
Only then will we succeed in preventing such scams at regular intervals in one part of the country or the other.
M.V. Nagavender Rao,