Don't confuse 'Ponzi schemes' with chit funds, says Sivaramakrishnan
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Against the backdrop of alleged chit fund scam in West Bengal, All India Association of Chit Funds representing the Rs 30,000 crore industry in the country today appealed to public not to confuse 'Ponzi schemes' with chit funds.
"People should not confuse Ponzi schemes that offer unfeasible interest rates, cash prizes or gift articles for deposits with Chit funds which are traditional and highly regulated," All India Association of Chit Funds General Secretary T S Sivaramakrishnan told reporters here.
He said countrywide there are about 10,000 registered chit funds with an annual turnover of Rs 30,000 crore while in Tamil Nadu it is a Rs 4,000 crore industry.
Following the recent scams, it is becoming increasingly difficult for people to enter chit deposit schemes, he said, adding the industry is governed by Chit Fund Act 40/1982 and regulated by the respective state governments.
Tamil Nadu Chit Fund Companies Association President Y S Mathivanan said people wrongly associated ponzi schemes with chit funds.
Recently, thousands of investors of the Saradha chit fund group in West Bengal launched protests alleging they were duped of about crores of rupees by the Group and its employees have become jobless. Saradha Group Chairman Sudipto Sen along with senior officials have been arrested.