While the recent raids by Crime Branch and police have forced leading para banking and residual finance companies to down their shutters with many officials taken into custody and documents and bank accounts seized, many little known outfits continue to flourish in the region.
Interestingly, the raids have helped the small companies rake in mullahs on the plea that they have valid licence to operate and hence were not raided by the Crime Branch or the police.
This has not only helped them win the confidence of the investors and consolidate their position but also lured new depositors who see a ray of hope in getting back their lost amount in the big companies.
For instance, in Sonepur, despite the hue and cry over para banking institutions and raid on five companies, around 13 companies continue to lure depositors with promises of big return.
They operate from lanes and by-lanes and manage to elude the notice of the police and enforcement agencies. A company, Mirco Leasing and Funding, continues to operate even though its Branch Manager in Bargarh was arrested by Bargarh police on May 16 from Bhatli.
Although many companies have closed down for the time being resulting in depositors making a beeline outside the house of the agents, nobody is sure whether they will be arrested or manage go scotfree.
The history of para banking in the region can be traced back to 1976 when Bethel Homely Savings Corporation was established by one KG George.
The company operated in interior areas and mining pockets of Sundargarh besides neighbouring State of Jharkhand and West Bengal and had its office in Rourkela. Things began to slide when George’s son took over. New to the trade, before he could understand its nuances, the company was in the dock with the depositors losing their money.
Since then many fly-by-night operators like Green Garden, Golden Forest, Good Earth, JVG Finance, AM Financial and Sai Bless Solutions have appeared on the scene and vanished in thin air leaving the depositors in a lurch.
Initially, the companies revolved their business on teak plantation and promised returns after 20 years.
Subsequently, new companies emerged with interest in floriculture and animal husbandry.
They offered huge commissions at times to the tune of 40 per cent of the collected amount to the agents besides foreign trips and through their goodwill the agents managed to collect deposits only to feign ignorance at the end or act as having lost mental balance.