West Bengal: Self-Help Group Loan ‘Scam’ in Bankura, Several Women Affected

A new ‘scam’ has come to light in the Manik Bazar panchayat of Sonamukhir block of Bankura district in which fake loans have been taken in the name of women of the region.

As per available information, loans worth Rs 6 crore have been accounted for in the name of women self-help groups. While this scam started in 2018, it accelerated during the COVID lockdown.

Allegedly, a section of women leaders associated with the ruling Trinamool Congress (TMC) is said to be involved. They are the ones looking after government-controlled self-help groups.

The affected women alleged that some bank officials were also involved.

"Thousands of women from economically-poor backgrounds worry about how they would repay the money that they did not borrow in the first place," Parul Ray, an older woman from Narayan Sundari village who makes a living by selling the leaves she collects from a nearby forest, told this writer.

Madhuri Pal, a domestic worker from Brajarajpur, shared Ray's concern.

The affected women have organised several demonstrations. As a result, the administration acted and arrested two key accused, Bhagyabati Mal and Choitali Dey, on April 20. Both are allegedly linked with TMC.

Inspector in-charge (IC) Sonamukhi police station Surya Chitta Bhattacharya told this writer, "We have taken the case seriously, and the administration will take immediate action."

The extent of the alleged scam is wider than Manik Bazar. Gram panchayats in other parts of the Bankura districts have also been allegedly affected,

Meeting of self help group Sonamukhi Manik Bazaar.

The self-help groups (SHGs) were established in 2006 by an amendment in the West Bengal Rule of Business (notification no. 196, Home Cons.).

Most SHGs were formed to ensure better financial security among their members, especially the uplift of economically-poor women. They typically constitute 10-20 members, including women and unemployed youth. The members are trained to make them self-reliant.

Over the last decade, the importance of SHGs has decreased. Rather than the earlier focus on training, SHGs are now only tasked with lending money to their members.

"Many group members allege they were unaware of the loans taken in their names," Ajit Ray, former MLA from Sonamukhi, told this writer.

"There are 57,356 SHGs in the Bankura district. The Central government covered them under the National Rural Livelihood Mission (NRLM). The TMC government named them 'Anandadhara'," said an officer of the District Rural Development Cell (DRDC) Bankura. DRDC regulates SHGs.

The officer further said 32,979 women SHGs had been loaned Rs 874 crore in the Bankura district. These loans have been given per a specific grading.

After forming an SHG, the group has to follow five principal rules. These are, regular meetings, regular savings, internal loaning, timely repayment, and proper bookkeeping. The working stage of SHGs involves saving and lending, bank linkage, and income generation.

After forming a group, Rs 15,000 is given as a revolving fund to the group account by DRDC. The department evaluates the group on five principal rules after six months. If the evaluation is positive, the group reaches the first grade.

"After the first grading, a group can loan Rs 1,50,000 from the bank. During the second grading, the amount increases to Rs 2,50,000. By the fourth grading, the group can loan up to Rs 6,00,000," a Punjab National Bank (Sonamukhi branch) official told this writer.

As per the rules, the group members must repay the loan at 7% interest; if the loan money is repaid within a specific period, they get a 4% interest subsidy.

After forming an SHG, sub-groups (upasangha) are constituted by two members of each group. Then sangha (apex body of SHGs) gets elected by sub-group members. The sangha is responsible for monitoring the work of SHGs in a specific gram panchayat.

On behalf of the sangha, CSPs (community service providers) look after group loans.

"The elections for sanghas were not done democratically. The people of the ruling party have taken over SHGs by force. No opposition face was allowed to contest. In such circumstances, the sanghas appointed women cadre of TMC as CSPs," alleged Subrata Chatterjee, a labour leader.

"The seeds of corruption have been planted in Sonamukhi. The district administration knows everything but is yet to take action. The Central government gives each sangha an annual grant of Rs 18-40 lakh to set up a small business or industry to empower women. How is that money being spent? Where are these businesses? Are women even involved?" Chatterjee further told this writer.

In response to these questions, a DRDC officer said the department sends proposals to the state government for approval.

"Several sanghas of Bankura district have received the money. We do not count how many projects have started. All sanghas (10) of the Sonamukhi block have received around Rs 26-40 lakh. From the Central fund, various types of equipment were bought for mushroom cultivation; sheds were constructed, but no work was done there," he told this writer.

It has been alleged that DRDC pressures the block administration to open more SHGs to show that women are self-reliant.

"Corruption is increasing through this system," said Manoj Chakraborty, a resident.

The extent of corruption in Manik Bazar SHGs is said to be “unparalleled”. Several group members allege that lakhs of rupees have been loaned in their name.

"We found this month that we were scammed. In 2012, we created Jaiguru women's SHG. We have never taken any loans. Still, a loan worth Rs 5 lakh has been shown in our name," alleged Sharmistha Mandal, a group member.

Mandal and other group members were unaware of this loan until their PNB bank accounts were closed in March.

During a demonstration in Manik Bazar, group members told this writer that the resolution book and cheque book were with two CSP members. They alleged that these CSP members used to take them to the bank to withdraw money. They said they were also asked to sign two-three cheques. Later, they alleged, the money was withdrawn in their name by using those cheques without their knowledge.

These SHG members have accused two persons – Mal and Dey -- for scamming them. They also suspect that some PNB persons are also involved in the alleged scam.

Suchorita Ray Pratihar, a member of the Krishna Anandashara group, said she loaned Rs 50,000 in September 2021. She was informed that a loan of Rs 40,000 was taken in her name in the same month, and another loan was taken in July 2022. These loans were taken by forging her signature.

The same ‘scam’ has happened to hundreds of women. Even after contacting their respective banks, they said their passbooks were not updated.

The writer covers the Bankura region for the ‘Ganashakti’ newspaper in West Bengal.