Chit Fund Cheating Cases

There is a famous quote which says people learn from their mistakes. In a way, after thoroughly cheated people able to learn and recognize their faults and able to find out what went wrong for them. It is like a person learns from his own mistakes. A person knows in detail about thieves after some precious valuables are stolen from his own house. He would be able to learn about it and then repair windows, doors and even the boundaries in order to stop trespassers. That person locks doors and windows and changes all the locks in order to protect his home. Similarly, there are many chit fund companies, which have taken away some from ordinary people who are equal to almost two year’s non-plan expenditure of state governments in Odisha.

Chit fund cheating is a grave scam:

It is a concern as how hard-earned money of the common masses has been taken away by force companies in the name of chit fund scams. What worries common man the most is after a thorough investigation day by day new revelations in this scam continuing, with involvement of ministers, engineers, doctors, professors, village heads and local petty politicians have all been involved in this scam? Now, after advance prove it is becoming crystal clear that involvement of this scam not only restricted to the periphery of Odisha but also involvement of people from hotel owners, mine owners, and industry owners of foreign countries.

Chit fund cheating is a big scam:

It is of course astounding revelations considering the amount of involvement of people and the level of involvement of people of all walks of life with premium and established credibility. Now, this investigation is taken over by the central bureau of investigation and it is perceived as neutral investigation. It would be difficult for Indian agencies to investigation foreign account holders at most times. There are many spider laws which get entangled into a different set of confusing laws and most times these take years to reach to convict. Nevertheless, it has become clear that at least there is glimpse of hope for people who have invested their hard-earned money into different chit fund companies in hope for maximization of gain could not easily find a slender of hope for retrieval of such money from these fraudulent persons and companies.

Hope for a logical conclusion of chit fund scam:

It is difficult to predict when these investigations would be completed and that too successfully by returning back money to people who have invested in such companies. Day by day with further investigation more and more revelations about newer companies comes to the forefront and that makes the entire investigation process more difficult and puzzling. Most times, in such investigation where there is foreign hand to cheating, it has been known that most times, all these investigation never reach to logical conclusions. But, we have to believe the works done by premiered security agency of India, the central bureau of investigation and the highest court of justice. The Supreme Court of India in order to wait for logical conclusion in investigation of chit fund scam.

Now, the most critical question as why such chit fund scam of this highest proportion is allowed to happen?

Why such huge number of companies, are allowed to cheat and take away hard-earned money of the common man? In order to know about the series of happenings we have to check and understand backgrounds of all these happenings. Odisha (Orissa) is predominantly, village oriented state, with most of people, living in villages and mostly is uneducated about all these chits performed by so called financial institutions. Most times, innocent villagers wants their money to be multiple times within the shortest span of time and for this they tend to reach private financial firms instead of government recognized banks.

In order to get their money multiple times, they reach nearer to these chit fund financial institutions and deposit their money there. In earlier times, in the age of the cooperative movement there is predominant advantages of the village economy are the existence of the cooperative movement in villager’s life. It all started in the era of seventies and continues till beginning of nineties During these times, most of government owned cooperative banking institutions collect money from villagers and deposit their and then return safely to villagers after certain period of time in the name of fixed deposit.

The reasons for growth of private financial units:

With the advent of liberalization of economy, most of these government institutions could not stand in the competition among different privately owned financial institutions which give more money within the same number of years of fixed deposit to individual account holders. In this way, most of government cooperative institutions became irrelevant and cash-starved. The second reason behind falling of government cooperative movement comes to prominence in the form of entry of the local member of legislative assembly members and counselors of government of the day into the day to day affairs of government cooperative banks. Slowly, these institutions caught within red-tapism and other forms of slowdowns and this creates irritations among village masses. In the mean time, after seeing such states of government owned cooperative banks, private financial institutions reached nearer to villages and provide different alluring provisions in order to lure innocent villagers to invest their money into their chit fund institutions.

End of cooperating banking backed by government:

Earlier, government used to help out these governments owned cooperative companies and used to provide additional money in case these financial institutions become cash starved. Whenever, there is different government in state and center, sometimes, center is hesitantly to help these cooperative institutions, as most of aided money does not reach to the common masses but reach directly to the middle man which is mostly prominent political persons in that state. Now, with mostly drubbing of these financial institutions, economic security provided by government to the money of the common man goes in to vanish mode. The government cannot and should not provide economic assurances of privately owned companies.

In earlier times, most of government owned cooperative banks provide security to village funds as well as provide short term loans and mortgages to people. Sadly, after nineties, all these cooperative banking sectors became cash starved and this provides a golden opportunity for different private financial companies, to reach villages and incur different additional income opportunities.

Reasons behind end of cooperative banking:

In the nineties, after our economy became free and we reached at the stage of liberalization government had allowed in accordance with world norms to private companies to buy out their shares and earn money. In this way, many privately owned companies, get bigger amount of money and begin their business of villages. On that front most of government owned cooperative banks were cash starved and unable to provide money for big interests. On the other hand, most of private financial institutions offered big multiplication of money within the shortest period. In reality all these are not in adherence with financial policy of government, but village people unable to understand this and invest their money in these chit fund institutions. It augments overall financial as well economic development of India but there are certain ghosts of these developments which hides from all lime lights in the invisible darkness of villages.

Entry of corrupt people in financial institutions:

Slowly, many corrupt personalities have taken over this and try hard to take back money for people from different sources and try to take advantage and redirect this money to other forms of utilization. In this process, they do not care for people who have tried hard to earn this money and most times, these money is meant for marriage of their girl or any emergency medical treatment. Sadly, all these naughty minds have taken over these private financial institutions, and have taken over all such public money and make their own private money. They invest all these chit fund money in different beneficial investments such as investing in creating so called a forestation, in the shipping business, real estate and spending these money for large scale commercials in print and motions medias.

They provide some sums to individuals which in turn attract larger scale village and illiterate people to massive investment in these chit fund industries. Slowly, deposit amounts of these companies rose to vertical heights and after reaching at certain deposit standards they vanish from these localities during darkness of nights. The saddest part of all these chit fund scams, is that government of the day, unable to find a single signs of frauds of these companies within several years, and how these companies and its owners have vanished from locality and how these companies are allowed to continue till to this date.

Problem arising out of banking nationalization:

After nationalization of banks in the early seventies of last century, most of nationalized banks change their approach to banking and they mostly concentrate on bigger towns and sub divisional headquarters. Mostly, there are 27 nationalized banks but only three to four banks reached in villages. Now, with introduction of opening of bank accounts for all by the central government the process of uprooting these financial institutions from village financial markets will continue to be removed from the scene. Due to the advent of Prime Minister’s Jan Dhan Yojana, it has now become ample clear that now people can open a bank account with ease. Still there is no answer to illiteracy where most people, who are illiterate, do not know this convenience provided by central government.

There are some middle men who try to lure the illiterate masses and offer them that they can open a bank account with a certain sum and mostly they also demand money from them for giving passbook. There is no replacement for education and it is important for the illiterate masses to listen to local radios in order to listen to different government offers in order to amplify and maximum most of the incentives offered by the government.

End of small scale savings schemes in Indian Postal system in last decades:

Indian postal system is available in mostly villages. Most times, postal distributors are very much known to villagers and they treat them as their own village man. Due to the advent of different private postal services such as courier services and the advent of the internet have killed most of the essential operations of postal services. Most times, villagers have deposited money in post offices but surprisingly in the last decade with the withdrawing of some postal schemes which directly concentrated in villages are now not there. Though, present government tried to revive such schemes which are a welcome step in this direction and an appreciation in this regard. In this way with the stopping of all such good schemes of post offices and complete dysfunctional of government’s cooperative banking led to super dependence of village people on private chit fund companies. In the last decade, central government has reduced interest rates on different savings options on savings of post officers lead to people to move private chit fund companies.

Lack of financial literacy among rural masses lead to cheating of chit fund:

Most chit fund scams have appeared in places of states which are comparatively poorer than other states of India. It appears in eastern states of India such as Odisha (Orissa), West Bengal, Assam and so on. Here, there is larger percentages of illiterate masses as well as most of these state governments have no adequate sum of money to spend for welfare of poorer people in villages. In Odisha, most of village households are of ladies oriented and there are several form of different policies of engaging ladies of villages into different welfare programs, but sadly due to inadequacy of government funds most of these funds have never ever gives opportunity for government to create any such financial incentives. So, there are no such alternatives for masses of villagers to create a savings account for them. There is no such ban in the remotest part of villages which compel them to deposit money in different chit fund companies.

Why such chit companies have evolved from nowhere?

Many commissioned agents of these so called chit fund companies were given good commissions from their chit fund company’s headquarter to lure innocent villagers in the name of returning of higher amount, to deposit their money in their respective companies. It goes on to show. The level of literacy among villagers is at the lowest point and that is why they failed to understand hidden motives of these chit fund companies. There is a complete difference between rates of literacy and rates of financial literacy. In Orissa, there are 72 percentages of people who can write on their own but most of these limited to writing their own or signature only. Imagine in actual how many people are really literature than it is actually seen to be. This goes on to show the real problem and why such chit companies have evolved from nowhere.

Even though government of the day, continue to provide different forms of incentives for people of villages, but not understanding all these benefits will not help them immensely. People should not be allured from wide advertisements and all possible maximization of money by different chit fund companies within shortest span of times as most of these incentives from different private firms are illegal and not in accordance with rules and regulations of security and exchange board of India (SEBI). Now, state government of the respective states where there are existences of such cheat chit fund companies need to be dealt with mighty force in order to let people understand the evils of such chit fund companies.

What state government should do eradicate cheatings of chit fund?

State government should open a special branch of law-enforcing agencies in the district headquarters. Sub divisional headquarters all across the state and they should be free to exercise their power whenever they find any such chat chit fund companies at large within the periphery of villages or anywhere. There should be a separate subject in education of schools and colleges about economic literacy and there should be government sponsored groups to educate such in village areas through different open drama and other songs which could be remembered by village people easily. Educated youths should be detected in villages and from there they should be empowered to include all such people in learning about different traits of economic literary.

Suggestions to wipe out false chit fund companies:

State government must amend financial rules and regulations and provide stringent laws for setting up such chit fund companies. Most times, these companies work anonymously without registering with SEBI. Stringent laws and regulations coupled with permanent audit from time to time all across financial institutions of states need to be done periodically. All village post office should be interconnected with the central head office and computerization of all services is the need of hour. State government should pressurize center to advance a proposal for creating at least one nationalized bank branch office at every village so that people can have all access to banking transactions and these can enlighten further financial literacy among the masses. State government must on its own create government sponsored small scale savings scheme with adequate security to appraise villagers for a suitable domain to invest and get back money. Last not the least, the age old successful ethics of cooperative movement must be revived in order to empower poor and equip their financial stability.
[subscribe]

Leave a Reply

Your email address will not be published. Required fields are marked *

Popular Posts