Centre denying role in WB chit fund scam

NEW DELHI: Countering West Bengal chief minister Mamata Banerjee’s claim that it had a role in the chit fund scandal in the state, the Centre has said state governments are responsible for regulating and registrations of such businesses.
Sources in the corporate affairs said the funds are governed by the chit funds Act, 1982, under which businesses can be registered and regulated only by state governments.
The clarification reflected the government’s desire to buffer itself from the political heat rising from the collapse of chit funds that left estimated lakhs of investors deprived of their savings. Banerjee’s bid to point the finger at the Centre comes amid speculation that Congress leaders are also involved in the schemes that went bust.
“The regulator of chit funds is the `registrar of chits’ appointed by a state government under Section 61 of chit funds Act. Powers of adjudication vest in the registrar and the state government concerned is the appellate authority,” sources said.
In case of failure of a chit fund business, the responsibility for winding up such a business also vests with state governments. Also prize chits and money circulation schemes are illegal and are banned under the prize chits and money circulation schemes (banning) Act, 1978.
Powers of investigation under this Act are vested with state police authorities concerned. Power to make rules under this law also lie with states.