Kolkata, Sep 26 (IANS): The West Bengal government will Sep 30 compensate 1,000 duped investors of the tainted Saradha Group chit fund, Chief Minister Mamata Banerjee announced Thursday.

The state government would try to cover another one lakh depositors before next month's Durga puja, and make efforts to reimburse another three-four lakh after Diwali (Nov 2), said Banerjee.

She said: "The Justice (retd) Shyamal Sen inquiry commission recommended that the state government could contribute towards reimbursing the affected. We are starting the process before Durga Puja. We will hand over some amount to 1,000 people at the Khudiram Anushilan Kendra on Sep 30."

"Before the pujas, in the next 10 to 12 days (from now), we will try to cover 1 lakh families," said Banerjee.

The five-day Durga Puja festival begins Oct 10.

"After Diwali, we will try to give money to another three to four lakh people," she said.

The Saradha scandal - the biggest to hit the state - came to light in April.

The company closed shop across Bengal after being unable to pay back the depositors -- mainly poor people who, lured by the promise of huge returns, parked their life's savings with the firm.

As the company went bust, there was a spate of suicides by agents and investors and protests across the state.

Saradha promoter Sudipta Sen was arrested with his close aides April 23 from Sonmarg in Jammu and Kashmir.

Days after the scandal came to light, the chief minister announced that a Rs.500-crore corpus would be set up to indemnify the duped investors.

The state government constituted the Justice (retd) Shyamal Sen inquiry commission to probe the scam and recommend ways of compensating the depositors.