<p>Worried about mushrooming chit funds, capital market regulator SEBI has urged the central government to formulate laws to set up a single regulator to ensure that they don't dupe investors, an official said here Tuesday.<br /><br /></p>.<p>"We have requested the government to make a new set of laws to provide a single regulator for such companies," SEBI chairman U.K. Sinha said when asked to comment on the proliferation of chit funds in the country, especially in West Bengal.<br /><br />The Securities and Exchange Board of India strongly believed that such firms were taking advantages of some "loopholes" in the existing regulations, Sinha said.<br /><br />"We have taken it up with the government and have asked it to plug loopholes," he said at an event organised by industry group CII here.<br /><br />According to Sinha, some investors - particularly in the eastern part of the country - were getting into investment schemes which were not legal.<br /><br />"People are investing money when they are promised that the money would be doubled in four years. They are also giving a commission to agents at 15 percent to 25 percent. I cannot think of any legitimate business where people can get that kind of returns," he said.<br />"After some time they would not get any returns. It is a very worrying situation," Sinha said.<br />Hundreds of such firms across India have reportedly flourished by flouting rules, raising concerns over safety of public money.<br /><br />On taking action against chit funds in West Bengal, Sinha said: "Whatever is coming to our notice, we have initiated proceedings. In some cases we have started investigations."</p>
<p>Worried about mushrooming chit funds, capital market regulator SEBI has urged the central government to formulate laws to set up a single regulator to ensure that they don't dupe investors, an official said here Tuesday.<br /><br /></p>.<p>"We have requested the government to make a new set of laws to provide a single regulator for such companies," SEBI chairman U.K. Sinha said when asked to comment on the proliferation of chit funds in the country, especially in West Bengal.<br /><br />The Securities and Exchange Board of India strongly believed that such firms were taking advantages of some "loopholes" in the existing regulations, Sinha said.<br /><br />"We have taken it up with the government and have asked it to plug loopholes," he said at an event organised by industry group CII here.<br /><br />According to Sinha, some investors - particularly in the eastern part of the country - were getting into investment schemes which were not legal.<br /><br />"People are investing money when they are promised that the money would be doubled in four years. They are also giving a commission to agents at 15 percent to 25 percent. I cannot think of any legitimate business where people can get that kind of returns," he said.<br />"After some time they would not get any returns. It is a very worrying situation," Sinha said.<br />Hundreds of such firms across India have reportedly flourished by flouting rules, raising concerns over safety of public money.<br /><br />On taking action against chit funds in West Bengal, Sinha said: "Whatever is coming to our notice, we have initiated proceedings. In some cases we have started investigations."</p>