Property prices hits in Bengal due to crackdown on chit-fund firms

Q: A year ago property prices in Durgapur were flying because of hit chit-funds. But now the property price in those localities are down 70-80%.

Santosh TR,

10th March 2015

Real estate News in Kolkata

real estate kolkata

real estate news in kolkata

property prices in durgapur

land prices in durgapur

malda

the rose valley group

murshidabad

medinipur

asansol

siliguri

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The trend continued even after the collapse of the Saradha Group, in April 2013. Even as the West Bengal government interrupted a CBI screening for over a year, ponzi operators went into a crazy collecting funds. As per a report it is found that over 600 ponzi schemes were running in West Bengal, till last year.

Kaustav Paul, Kolkata

10th March 2015

Comment

Right Kaustav,
But the spate of arrests by the CBI since August 2014 and the enlarge scope of the investigation have stopped these operators in their tracks; they are now desperate to sell assets at deep discount. The CBI investigation that began with the Saradha scam in May 2014 has already expanded to 8 more ponzi operators.

Anil Debnath, Kolkata

10th March 2015

And the last meeting is allegedly the biggest of them all — the Rose Valley group. The end result of all this is the collapse of the land market. Land prices are collapsing in Malda, Murshidabad, Medinipur, Asansol and Siliguri, once the hubs of the money-collection activity. Kolkata is relatively less affected though prices have dropped 25-30%.

Kaustav Paul, Kolkata

10th March 2015

Yes, all of that is history now. Land prices are now down 70-80% in Durgapur over last year. Thanks to the Supreme Court ordering a CBI probe into the money-collection companies in May 2014. These companies set out to park funds in real-estate, mostly in the districts. This also served a key purpose of convincing the people about the company's finances, in turn, attracting deposits.

Kaustav Paul, Kolkata

10th March 2015

Comment

Because of that the influence of money-collection companies on land prices in Bengal became clear in the days following the 2008 financial crisis. Contrary to the trend elsewhere in the country, land prices continued to rise here in Bengal. Not surprising, considering that was the period when deposit-taking activities peaked, and Saradha Group was leading the pack.

Anil Debnath, Kolkata

10th March 2015