Even though the State Government claims to have taken steps to check nonbanking and chit fund operations, yet such financial institutions are operating in Gajapati district without any obstacle.
It is alleged that the district administration and police have failed to implement Government laws for which poor and gullible people are still being exploited by chit fund companies in the district.
“The chit fund firms have changed their modus operandi to give a slip to the Government. They are not giving any details about their companies in the saving books and collecting money from investors on a daily basis. The companies are collecting three-five per cent interest monthly from them,” said a local.
Sources said some businessmen of Paralakhemundi and neighbouring Andhra Pradesh are collecting money from small vendors at the new bus stand. An institution named SBF is collecting `6,000 in 20 weeks against loan of `5,000. Many poor people are forced to take loans from the institution for various reasons.
Noted labour leader Subash Chandra Rao said, “As banks are not keen to provide small-scale loans to common people, small businessmen like betel shop owners, eatery owners, vegetables vendors, garage and book shop owners are borrowing money from the non-banking institutions to expand their business.”
It is demanded that such institutions be identified and action be taken against persons involved in the illegal business.