November 18, 2019
Kalyan Banerjee speaks on The Chit Funds (Amendment) Bill, 2019
FULL TRANSCRIPT
I want to inform you that, West Bengal has witnessed flourishing of chit funds from the late-70s, Ever since the Left Front came to power. In 1979, the scam Sanchayita chit fund came to light. Overruling The Prize Chits and Money Circulation Schemes (Banning) Act, 1978 as was passed by the Parliament, Sanchayita continued to operate in full swing with the patronage of some political leaders playing behind the curtain. In the early ’90s poor investors of the state of West Bengal were shocked to hear about similar nature of sorts and there were different companies implicated with that.
It has been observed that, there was no specific Act passed by the Parliament or the State Assembly for taking the promoters of such Chit Funds to task, to stop collection of money from poor investors against promise of lucrative returns. Although initially in 2003, the State Assembly passed a draft Act and sent it for assent. The assent was not given. In 2013, under the leadership of Hon’ble Chief Minister Mamata Banerjee another law was enacted, which is called The West Bengal Protection Of Interest Of Depositors In Financial Establishments Bill, 2013. Unfortunately objections were sent by the Central Government at that point of time. And assent was not given and different reasons were cited.
The state of West Bengal, on different occasions in 2013 and 2014 sent letters to the Government. Now thereafter the Central Government in 2014 raised a certain point, incorporating certain points in West Bengal Protection Of Interest Of Depositors In Financial Establishments Bill, 2013. They had pointed out certain lacunae in the Bill and made some suggestions, which were incorporated. Thereafter in 2015, that Bill was enacted. In 2015 the Hon’ble President of India, on the advice of Central Government, had given assent to that.
Madam, I want to inform you in this regard that the state government of West Bengal, under the leadership of Hon’ble CM Mamata Banerjee, prepared a specific scheme of payment of compensation to the depositors in distress and an amount of Rs 500 crore was created for this purpose. It was decided to pay compensation through Justice Shyamal Sen Commission, set up by the state government on April 24, 2013 and a special investigation team was to render assistance to the commission. A total of Rs 251 crore worth cheques were issued for due compensation to the depositors in distress besides actions against the offenders including judicial custody of the main-accused person by the government. It was known to everyone that a writ petition was filed on the Sarada matters; then it was investigated by the CBI. But the investigation is pending from 2013 to 2019. I am just bringing this to the notice of the minister who is present.
CBI has undertaken the investigation in 2014 under the directions of the Supreme Court. Why till now chargesheets have not been filed? It is not the credit of any investigating agency to keep the persons as repeat as in the bail in the jail. Credit is attained after trial on conviction, when the accused are sent to jail. That has not been seen. For what reason? If anybody has committed a crime, let them take action, Comments are there, I do not mind that. Whoever the persons are. Why you are not
Now madam I want to say to the honourable minister in the background of the fact that this august House has passed the Banning of Unregulated Deposit Schemes Bill, 2019. Assent has been given. Is there any necessity to continue with the Chit fund Act? Why? Scrap it. I will suggest scrap it. All these provisions have been made in the Banning of Unregulated Deposit Schemes Bill, 2019. Now it has become an Act.
Chit fund really gives an incorrect impression to the common people. Although it is C-H-I-T, people takes it C-H-E-A-T. Effectively, in one of the finance standing committee meetings, we have come to learn that one of the members of the standing committee, in one meeting, which is begging refer to forward a question to the Governor of the Reserve Bank of India asking the term chit fund, I mean C-H-I-T fund is used to describe such funds. Reserve Bank answered the question that it is not C-H-E-A-T. How will common people meet that difference. What is the necessity? Stop it. Scrap it. There are other Acts. Why you will indulge in this sort of business, wherein the poor cultivators are suffering? Why we will indulge? Scrap it. You have brought sufficiently good Bill, which deals with the other things; it is covered. Now you scrap it.
My question remains, though. So, if chit funds are valid and ponzi schemes invalid, how will the common people be able to make a distinction about investigating in chit funds and investigating in ponzi schemes. The basic fundamental things are missing, Sir. That is the reason people are misled.
Now Madam, I will just show that in Sarada Case, for what reason CBI is making the investigation. In Subrata Chattorai’s case at paragraph 25, I will quote Madam, with your permission, “There is yet another aspect to which we must avert at this stage. This relates to the role of the regulatory authorities. The investigation conducted so far puts a question mark on the role of regulatory authorities like SEBI, Register of companies and officials within whose respected jurisdiction and areas of operation this scams not only took but flourished unhindered. The synopsis filed by Mr ‘So and So’ named some officials belonging to this authorities and give reasons why their role needs to be investigated. The synopsis goes to the extent of suggesting that regular payments towards bribes were paid through middlemen to some of those who were supposed to keep an eye on such ponzi companies. The Regulatory Authorities, in itis common ground, exercised their power and jurisdiction under central legislation, possible connivance of those who were charged with the duty of preventing the scams of such nature in breach of the law, therefore needs to be closely examined and effectively dealt with. Investigation into the larger conspiracy angle will thus inevitable bring such statutory regulations also under scrutiny.”
When the investigation was handed over to the CBI, at paragraph 35.6, the Supreme Court had given the direction that the role of regulators like SEBI, authorities under the Companies Act and the Reserve Bank of India is also under investigation by the state police agency which may have to be taken to a logical conclusion by an effective and an independent investigation.”
Many comments will be passed. I do not mind. My question is to the Hon’ble Minister. Why not a single person from the regulatory agency like the Reserve Bank of India, SEBI and others. According to the Supreme Court that the whole conspiracy was built up through them, a larger conspiracy scheme is there; why not a single person was called for interrogation? Why not a single person has been arrested? Those who are in charge of looking into the matter, did not do so. Those who have committed the offence but in terms of the Supreme Court why did you not touch? (I mean this investigative agency, not personally the Finance Department) Why has the CBI not taken any steps against the RBI or SEBI that whose connivance right from 1979, this scheme, ponzi schemes are being continued?
Madam, I will rather request the Hon’ble Finance Minister, we have heard many comments. Please finish the trial, finish the trial. If I have committed anything wrong, do send me to jail, I do not mind but do not keep it pending for your election issues. With that I am concluding, I will rather request Madam, just through you, don’t give any chance to anybody to indulge in these sort of things. Don’t bring an amendment. When you have brought this, kindly scrap Chit Funds Act. That will be better for this country and better for the investors.
Thank you.
