India has a very large low-income rural population with low access to formal banking facilities. A web of parallel informal banking arose to fill the vacuum. At its centre were moneylenders, who used to charge exorbitant rates of interest, this practice was greatly curbed by several Moneylenders Acts enacted by state governments in the 1950s. However, the fundamental failure to replace the role of moneylenders gave rise to fly-by-night financial operators who ran Ponzi schemes in various disguises. However some commentators place the blame for these kinds of Ponzi schemes on greed rather than exclusion from formal banking systems. Thus, fraud agencies like Saradha Groups, Jeevan Suraksha etc. under some political patronage grows like mushrooms and embezzle huge public money. Lack of economic conciousness among the people and absence of a strict vigilant body in regard to check such fraud agencies lead to econmic dispartiy from time to time.
Posted on: Sun, 14 Jul 2013 15:41:38 +0000
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