Chit funds resurface in Bengal under garb of agricultural schemes

Potato and other agricultural schemes offer investors guaranteed return of 20-100% on their investment within a fixed period.

After lying low for the past several years after the Saradha scandal unfolded, chit funds are back in business in rural West Bengal, this time under the garb of "agricultural schemes".

The consumer affairs department has started a campaign against these chit funds which are operating on a small scale in various parts of Bengal.

"For more than a year we have been receiving several complaints, especially from rural Bengal about investors not getting returns or the capital siphoned off in various agricultural schemes," Consumer Affairs Minister Sadhan Pande told PTI.

The minister said that some chit funds promised huge returns on investment on potato purchase scheme and some others promised huge returns on tree plantation and poultry farming.

These ponzi schemes are not big like Saradha or other major chit funds companies which are presently under the scanner of the CBI and the Enforcement Directorate, according to the minister.

After the Saradha bubble burst in April, 2013, several Ponzi schemes and chit fund companies had to wind up their operations as central and state agencies cracked the whip amid protests by lakhs of defrauded investors.

According to the consumer affairs department, these chit funds are operating at such a small level that at times it becomes tough even for the local administration to locate them.

"These operators are taking the advantage of lack of proper banking facilities, poverty and illiteracy of the investors. In most cases the promise of huge returns lure the investors into the trap. In most cases the investors and the frauds are known to each other," a senior official said.

The official said that in many cases these potato and other agricultural schemes offered investors guaranteed return of 20-100 per cent on their investment within a fixed period of time.