"We recently conducted an inquiry and found that certain organisations, by obtaining registration as a multi-state cooperative credit society (MSCS) from the Centre, are raising money from the common public by promising huge returns. Neither do they have a no-objection certificate from the state nor any kind of RBI permission," State Cooperative Minister Jyotirmoy Kar said.

"We suspect that chit-fund companies/Ponzi schemes which used to operate in the eastern states may be using the guise of MSCS to raise money. These companies may be taking advantage of the MSCS Act to evade legal action," he said.

After the Saradha bubble burst in April, 2013, several Ponzi schemes and chit-fund companies had to wind up their operations as central and state agencies cracked the whip amid protests by lakhs of defrauded investors.

MSCS is cooperative society which operates in more than one state and has a minimum of 50 members in one state.

According to officials of the state cooperative department, the MSCS acts as a good option for chit-fund companies as it more or less matches their pattern of collecting money and operations.

Kar said the matter first came to light a few months ago when he received a complaint from a woman in East Midnapore district that a MSCS organisation took Rs 70 lakh with a promise of huge returns but was now untraceable.

"After getting the complaint we started an investigation and found that the address on which the company was registered in Kolkata doesn't exist at all," he said.

According to Kar, it was found that around 100 MSCS are functioning in various districts of the state and are raising money from the common people with promises of huge returns on recurring and fixed deposits.

"Out of these MSCSs, no trace is to be found of more than 90. Neither could we trace their officials or their offices in West Bengal. We can't even take any action as they received their MSCS registration from the Centre," he said.

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