Panel for ban on chit funds in West Bengal

Kolkata, April 27 (IANS) A social security panel Saturday demanded that West Bengal immediately seal offices and confiscate assets of all the fraudulent companies operating in the state, and demanded a ban on chit fund firms.

The Forum for Integrated National Security (FINS) is a Mumbai-based group and raises, discusses and propagates issues, which have direct impact for peace and prosperity of the citizens.

"The ministry of corporate affairs has pointed out that there are 73 companies in West Bengal that are engaged in collecting illegal deposits, but so far the state has initiated action only against Saradha and that too only under the Criminal Procedure Code," FINS chairman Ashok Ghosh said here.

The body, working in the field of social security, urged the state government to seal the offices of all the 73 firms and confiscate their assets, including bank deposits.

It has recently made a submission to Chief Minister Mamata Banerjee that her government needs to act on an emergency basis and prevent further erosion of funds from the system.

The forum, however, said Banerjee's plan to form a corpus of Rs.500 crore through raising taxes for compensating the depositors who allegedly lost money in the scam, would not be "permissible by law" since the state could not raise funds to participate in private affair.

"All the companies involved in the business of illegal money raising are private companies and money deposited by depositors is also private affairs," it said in a statement.

The FINS is a CBDT (Central Board of Direct Taxes) approved panel.