BHUBANESWAR: Thousands of small depositors who invested in chit fund firms and lost their earnings may not get any reimbursement anytime soon for, the process could take longer than expected.
Although the State Cabinet recently approved the proposed amendment to Odisha Protection of Interest of Depositors (OPID) (In Financial Establishments) Act, 2011 for identification of small investors, it would have to go through a lengthy procedure before the modifications are formally ratified.
The amended provision would have to be placed before the State Assembly for its approval and that will be possible only in July when the monsoon session of the House meets.
However, the critical stage comes after the amendment receives the State Assembly’s nod and is sent to the Centre for its approval.
“The OPID Act, 2011 itself took two years to get the sanction of the Centre. We are hopeful the amendment does not take such a long time or else it would be an exercise in futility,” said sources in Finance Department. The OPID Act had received the Presidential assent in August, 2013.
But the Government, which had floated a `300 crore corpus to compensate investors, almost took a year and a half to realise that the reimbursement process hinges on proper definition of small depositors who were worst victims of the Ponzi scam.
Its proposed amendment says people who invested `10,000 and less should be declared as ‘small depositors’ and entitled to compensation from the corpus.
While the proposed amendment will have to meet legislative procedures, the identification of small depositors will be carried out by the Commission of Inquiry headed by Justice MM Das, which has received about nine lakh affidavits.
The State Government has engaged a Mumbai-based agency to digitise the affidavits filed by investors and the latter has mounted efforts to create a database so that the small depositors could be identified.
However, the Government’s worries could be far bigger since a State-level outfit of investors had slammed the investor identification process saying the exercise may not cover all depositors and a tehsil-wise survey must be conducted.
Meanwhile, the process of hearing on liquidation of assets of chit fund firms, which were booked by the Economic Offences Wing (EOW), is at an advanced stage for several companies. In February this year, a designated court had ordered auction of `63 crore assets belonging to Rose Valley Group.