Chennai, Mar 21 (IANS): The Tamil Nadu police's Economic Offences Wing is cracking down on financial institutions that promise huge returns and collect money promising more interest on the investment.

This is following several instances of fly-by-night financial institutions duping investors by promising huge returns of more than 10% per month. These institutions also promised more than 6 to 7% interest per month on deposits also.

The police on Sunday conducted a raid at financial institution Amro Kings Ltd, Kodambakkam, and arrested three people including the owners of the company and a relative. Police sources told IANS that the three had cheated around 3000 investors and swindled around Rs 40 crore.

The raids and arrests came following complaints from investors that they were not returning the investment money or paying the interest as promised.

The EOW will be conducting raids on many financial institutions that are promising astronomical interest rates.

A senior EOW officer told IANS that there have been many instances of gullible investors who put their money in private investment companies that promised huge interest getting cheated.

According to the officer, the number of financial institutions going bust in Tamil Nadu has increased . He added that since January 2023, more than seven cases of financial institutions going broke have been reported in the state.

Many people have committed suicide after losing their money by investing in such fraud companies.

Compared to the highly literate neighbouring Kerala, the number of such cheating cases was earlier less in Tamil Nadu but of late the people who invest money in private financial institutions and multi level marketing schemes expecting huge returns are on the rise in the state.