Lessons from Saradha scam: India needs a chit fund regulator, now

Admin   |   28 November, 2014   |   654   |   3980

The whole episode on the infamous multi-crore Saradha scam has taken a new turn with arrested ex-Trinamool Congress MP, Kunal Ghosh, accusing West Bengal Chief Minister Mamata Banerjee of being the biggest beneficiary of the scam. The Trinamool chief Mamata has so far defended her position on the subject and the blame game is on.



One thing is clear: the Saradha scam has much more linkages with politics than economics and more skeletons are waiting to tumble out of the closet in the days ahead. Saradha did exist for over a decade unnoticed by regulators and public scrutiny before it grew enormously in size and finally collapsed in 2013.



On the other hand, the Reserve Bank of India (RBI) is busy tightening its grip on the non-banking finance companies (NBFCs) to enhance the oversight on these institutions, which are often called shadow banks in the financial system.