Unauthorised chit fund activities have to be curbed: PM

Prime Minister Manmohan Singh today stressed on curbing unauthorised chit fund activities like the one involving Saradha Group in West Bengal.

"The unauthorised collection of deposits in exchange for the promise that exorbitant rate of return will be given, this is something which has to be curbed," Singh told reporters in the Rashtrapati Bhavan here.

He was responding to media queries on the Saradha chit fund scam which has allegedly defrauded thousands of depositors.

The Central government has already announced an SFIO (Serious Fraud Investigation Office) probe into the functioning of Kolkata-based Saradha Group and other such entities which are involved in chit fund business.

Stock market regulator SEBI is also investigating illegal money-pooling activities of such groups.

The preliminary probe into Saradha Group and other entities show that West Bengal and Northeastern states have become the favourite hunting grounds of companies engaged in illegal money collection activities through chit fund route.

A special task force has been set up under the SFIO to carry out all investigations into such companies, the Corporate Affairs Ministry had said on Thursday.

The probe follows after massive protest against alleged duping of lakhs of investors by Saradha Group through their chit-fund and other money-pooling activities in West Bengal.

The Corporate Affairs Ministry had said the Task Force will coordinate with other law enforcement agencies and regulators wherever required, in its investigations.