Unauthorised collection of deposits need to be curbed: PM

New Delhi, April 27 (IANS) Prime Minister Manmohan Singh Saturday said the unauthorised collection of deposits for chit funds should be curbed in the wake of the Saradha Group defrauding thousands of depositors.

Speaking to reporters at Rashtrapati Bhavan, the prime minister said: "The unauthorised collection of deposits, in exchange for the promise that exorbitant rate of return will be given, is something which has to be curbed."

Six cases, including for non-payment of salaries to employees and for duping depositors, have been filed against arrested Saradha Group promoter Sudipta Sen, who was remanded to 14 days' police custody by a court Thursday.

T.S Sivaramakrishnan, general secretary, All India Association of Chit Funds, has said that while the incidents concerning Saradha are "definitely scary and tragic, attributing it to chit funds, will only further aggravate the whole issue, as it may create a run even in the established in the chit fund companies, who are playing a major role in the Indian economy".

In a statement, Sivaramakrishnan said the Saradha Group had varied business interests with around hundred and odd companies which were in realty, construction, exports etc. "However, what is quite glaring is that they did not float any 'Chit Fund' company, yet their scam/failure is attributed to Chit Funds!"