Deterrent actions against illegal banking by MLM cos called for
THE findings of the report of the commission, set up on May 4, 2011, to investigate the activities of the multi-level marketing company Juba Karmasangsthan Society yet again reinforce the widespread allegations that cooperative societies and MLM companies have engaged in financial malpractices and cheated people since they came into being over a decade or so ago. According to a New Age report on Saturday, the report submitted to the finance ministry last week has revealed that Jubak executives have swindled Tk 2,588.11 crore collected from public through unauthorised banking and illegally invested the fund in real estate business opening individual housing companies. More importantly, the report found ministers, members of parliament and political leaders giving indulgence to mushrooming of such entities in the country, while it also accused relevant government officials of being lenient towards the companies.
There are thousands of companies other than Jubak and Destiny 2000 in the country which are registered with the Department of Cooperatives under the local government, rural development and cooperatives ministry but have conducted banking operation without any permission from the Bangladesh Bank, the sole authority to approve such activities, under the nose of successive governments for long. It is learnt that, run by the people eager to make quick money, they have so far collected deposits at rates sometimes even double the interest rates given by the entities conducting normal banking operations. On the other hand, being attracted by such lucrative offers, people, especially those belonging to fixed- and low-income groups, keen to earn some extra money in addition to their regular income to reckon with the rising cost of living, largely thanks to the flawed economic policies by the incumbent government, made a beeline for investing all their savings in different schemes declared by those entities in recent times. Once a sizeable amount of deposits collected, however, many of those companies have already either disappeared from the scene with the money or stopped giving the depositors the promised money showing lame excuses. Allegations are there that the owners of many such entities have resorted to even money laundering in this period ruining their depositors altogether.
Encouragingly, in the face of public demand, the government has taken some steps against a number of companies, including Jubak and Destiny 2000, reportedly engaged in such fraudulent practices. Additionally, a new law has recently been enacted essentially to prevent any illegal debt collection by the companies not registered with the central bank. That apart, the commission in question has also suggested stern actions against the companies involved in deceptive financial activities. Hopefully, the incumbents will translate all this into reality to the letter and in spirit soon.
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