West Bengal government has withdrawn a bill aimed at protecting interests of depositors from chit funds that was awaiting Presidential assent following objections from the Centre and promised to get back with a new one.
The West Bengal Protection of Interest of Depositors in Financial Establishments Bill, 2013, which was passed by the state assembly following uproar over the Saradha chitfund scam, has been withdrawn after the Finance Ministry raised objections on a few points and sought clarification from the state government.
"The West Bengal government conveyed to us that it would get back with a new legislation allaying all apprehensions and clarifications," a senior official said.
The three points on which clarifications were sought include widening of powers of special designated courts and that no court could grant anticipatory bail as well as a suggestion by the Centre for adding a new provision for compounding offences.
The Bill formulated by the Trinamool Congress government was passed in the state Assembly on April 30 in a two-day special session, following the Saradha chitfund scam. It was submitted to the central government for Presidential assent.
A similar bill brought by the previous Left Front government in 2003 was faulty and incomplete and did not get Presidential assent.
The previous Left Front government did not withdraw the Bill when it was returned in 2006, but chose to introduce another legislation on the similar subject in 2008, which was subsequently passed in the Assembly. However, this legislation was also not enacted.
The latest Bill is more serious and stringent in nature. It provides for confiscation of property of the financial establishment or the promoter, partner, director, manager, member, employee or any other person responsible for its business affairs. It also empowered entry of premises and inspection of documents.
The scam-ridden Saradha group is facing multi-agency probe for illegal raising of deposits from investors across West Bengal and some parts of North East India.
According to the Bill, the competent authority shall, after making an assessment of the deposit liabilities, apply before the designated court from time to time seeking permission for making payment to depositors from out of the money realised.
Thousands of investors were allegedly duped by Kolkata- based Saradha group and its affiliated companies through their ponzi schemes. After the group collapsed, its promoter Sudipto Sen and two of his accomplices were arrested in Kashmir after a week-long hunt.
A ponzi scheme is a swindle in which a quick return on an investment is offered.
Centre's investigating arms like IT Department and Enforcement Directorate have already initiated action against Saradha Group under various laws including the Prevention of Money Laundering Act (PMLA).
The West Bengal government also set up a Rs 500 crore relief fund for the investors allegedly duped by the Saradha group. The relief would be given to the affected small and medium investors of Saradha Group.
Their names would be recommended by a commission of inquiry.
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