Worried about mushrooming chit funds, capital market regulator, the Securities and Exchange Board of India (SEBI) has urged the government to formulate laws to set up a single regulator to ensure thay don't dupe investors, chiarman UK Sinha said on Tuesday.
"We have requested the government to make a new set of laws to provide a single regulator for such companies," said Sinha, on the proliferation of chit funds in the country, especially in West Bengal.
The regulator strongly believed that such firms were taking advantages of some "loopholes" in the existing regulations, said Sinha. "We have taken it up with the government and have asked it to plug loopholes."
"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%-25%. I cannot think of any legitimate business where people can get that kind of returns," he said.