Chit Fund frauds on rise, RBI cautions public

KOCHI: The rising number of chit fund fraud cases reported in the past few months have become a cause of serious concern for the state Police. The Reserve Bank of India, which has come across numerous complaints with respect to chit fund frauds, has alerted the cyber police.The RBI has received complaints that some of the chit fund companies are operating using SMS and emails for propagation of their business, especially in the central part of the state.According to cyber cell officials, complaints have been pouring in day by day. “More than 30 complaints have come within two months from Ernakulam district alone. These companies generally make offers through letters, e-mails and SMSs. In addition to their usual practices, the fraudsters have now resorted to issuing certificates, letters and circulars on letterhead that look similar to that of RBI with forged signatures of its executives or senior officials,” an official added.Elaborating upon their modus operandi, the official stated that the fraudsters even resort to posing as senior officials of the central bank and lure the public into depositing money in their accounts which they have in branches of certain Indian banks. “Once the funds enter the account, they withdraw the money and vanish,” he said. Reserve Bank senior officials in Mumbai said that it has come to their notice that certain overseas organisations have been advising individual companies and trusts in India that huge sums of money for disbursal of loans in India at cheap rates has been kept in an account with the central bank and the funds, to be released after the RBI’s approval. To substantiate the claims, even copies of certificates and deposit receipts purportedly issued by the Reserve Bank are being produced by such operators, they said.“The RBI had cautioned the public against such fly-by-night operators. The losses that we have reported amount to lakhs of rupees. The RBI has never authorised any foreign lottery or chit funds that work through SMS and emails. People must ensure that the institutions where they invest money are authorised and they can seek assistance from the RBI officials to ensure safety of their deposits,” said a senior RBI official in the Thiruvananthapuram unit.