The crackdown on Kerala-based financial company Popular Finance has revealed that it collected Rs 2,000 crore from the depositors. The firm used to lure customers with ponzi scheme and giving buyers returns for their deposits with the money from fresh deposits.
Popular finance was running its schemes across 274 branches in Kerala, Karnataka, Maharashtra and Tamil Nadu. Out of these, currently 250 branches are operational.
Joseph Cherian, a resident of Harippad had deposited Rs 22.80 lakh in popular finance. He returned to India 10 years ago and deposited his life savings he earned abroad into the scheme.
“My family and I were living from the interest of this deposit. This was my life's savings all that I saved working in the gulf. I have two daughters one in class 8 and other in class 6. We don't know how we will live, we have no earnings," Joseph says. The family used to receive an interest of 12 per cent.
The trouble started when the people didn’t receive their interests during the last six months. Intially the family told that it was due to the pandemic that they weren’t receiving their dues on time. However, things became visible with time.
"I am on the verge of suicide, I don't know what to do," Joseph laments. Police have so far received complaint from depositors to the tune of Rs 600 crore.
Popular finance began in 1965 as a gold loan firm. It spread to Kerala, Karnataka, Maharashtra and Tamil Nadu. Company owners Thomas Daniel, his wife Prabha Daniel and their daughters Rinu and Riya have been sent to police custody for a week on Monday.
In 2014, RBI had warned that they did not have a license for taking deposits. The crime branch has also been registered a case in this regard.