Government looking into chit fund issue: Pilot
The central government is looking into the issue of some chit funds and Ponzi schemes duping small investors by using legal loopholes, union Corporate Affairs Minister Sachin Pilot said here Sunday.
"The central government is looking into the issue. We would also encourage state governments in taking necessary action against there firms. These firms are now misusing the loopholes," Pilot said here.
The corporate affairs ministry was planning to begin an awareness campaign among investors to caution them about these financial schemes, he said.
Pilot said the central government has received complaints about financial frauds committed by "some companies, chit funds and Ponzi schemes".
"Our main objective is to protect small investors from these companies, who are taking away their (investors') hard earned money".
He said besides West Bengal, Assam, Sikkim, Maharashtra and Madhya Pradesh are also facing such problems.
The Reserve Bank of India (RBI) last week said it has already warned all the state governments about mushrooming of chit funds and also written to them to take appropriate actions against such funds for duping depositors.