Chit fund firms using names of business houses to dupe people

BHUBANESWAR: An intelligence alert from the Reserve Bank of India (RBI) has sent alarm bells ringing in the state Crime Branch. According to the input, several chit fund companies in the state have been collecting money from people using the names of reputed companies like the Tata and Mahindra groups.
Following the alert, the Crime Branch sent a letter, a copy of which was seen by TOI, to all district superintendents of police (SPs) to track down such sham financial entities.

"We have asked all the SPs to crack the whip on fraud firms that use names of reputed companies like the Tatas and Mahindras to hoodwink people. The Bhubaneswar branch of the RBI had received inputs from its headquarters about the imposters. Later the RBI here alerted us," additional director general of police (Crime Branch) Santosh Upadhyay told TOI.

"The RBI has told us that only banks and post offices are authorised to collect deposits," Upadhyay added. The Crime Branch letter cited a number of complaints the RBI has received about illegal collection of deposits and loan offers by several fraud financial companies.

What has got investigators scratching their heads is the impunity with which the chit funds firms have been operating despite the CBI probing atleast 44 firms for alleged scams.

Police sources said at least 20 people of 15 chit fund companies have been arrested in different districts between 2015 and 2017. But this seems to have had little effect on the firms, many of whom started operations towards the end of 2014, around a year after the scam surfaced.

"We have been sensitising people to stay away from companies that offer attractive interest rates or overnight returns on deposits. The RBI too spreads awareness. We suspect the sham companies are targetting gullible investors in rural areas," a police officer said.

In January and June 2015, the RBI had alerted the Crime Branch and finance department about illegal operations of some chit fund companies whose activities are being probed by the CBI. The RBI had then said the companies continued to collect deposits from people despite the crackdown by the police and CBI.

Sources said a toll-free number (18003457103) launched by the Economic Offences Wing in January 2015 still receives complaints relating to activities of chit fund firms in different parts the state. In August 2016, the RBI had launched a portal (www.sachet.rbi.org.in) to facilitate filing and tracking of complaints, besides providing information about entities registered with a market regulator or permitted to accept deposits.