RBI asks states to keep a tab on chit funds

RBI

RBI Governor D Subbarao on Thursday said he has asked the state governments to tighten fists on the chit funds operating under the banner of multi-level marketing companies. "The responsibility for checking (on such funds) and prosecution for violation of the law is with the state governments. We have written to all of them to be vigilant about this and take appropriate action," Subbarao told mediapersons here after a meeting of RBI board.

According to an estimate of the RBI, over Rs 15,000 crore have been amassed by the chit funds in West Bengal over the years.

State Finance Minister Amit Mitra, who accompanied the RBI Governor to a meeting with Chief Minister Mamata Banerjee at Writers' Buildings, refused to comment on whether any steps have been taken by the West Bengal government against such chit funds operating in the state.

A few of them have stakes in media business, too. Even Trinamool Congress MP Somen Mitra wrote to Union Finance Ministry as well as the Prime Ministers' Office about a year ago about the activities of the chit funds saying they are playing ducks and drakes with money of the poor.

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