This refers to the report "Ponzi schemes thrive on loopholes" (May 19). To reduce the occurrence of chit-fund scams, the government should make registration compulsory for all chit-funds. Also, to protect small depositors, the law should provide that suitable deposit insurance cover for deposits up to a limit of, say, Rs 1 lakh per individual, be made mandatory for all such entities accepting deposits. Provisions should also ensure that a suitable charge is created on the promoters' personal assets declared at the time of fund registration in favour of depositors, preventing them from alienating their assets in favour of third parties. This will keep fly-by-night operators away.
V Sridhar Kolkata
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