Govt to set up new body to check ponzi schemes | india | Hindustan Times
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Govt to set up new body to check ponzi schemes

india Updated: Apr 01, 2015 01:19 IST

Recent financial scams like Saradha, Rose Valley or the Pearl Group schemes have one thing in common — all have collected money from the poor and vulnerable sections of the public by flouting norms.

In a serious bid to act against such money deposit and collection frauds, it was decided in a recent meeting chaired by Union minister of state for finance Jayant Sinha that a Permanent Central Coordination Mechanism would be set up.

“Such a mechanism could be housed in one of the investigation or enforcement agencies as of now,” a top finance ministry official privy to the development told HT on condition of anonymity.

“The details would be worked out by the high-level inter-ministerial group (IMG) set up by the department of economic affairs under the finance ministry,” the source added.

The high level IMG was formed on December 30, 2014, to identify gaps in the existing regulatory framework for illegal deposit taking and money collection activities and to suggest measures including the formulation of a new law.

The idea of a new permanent body, first proposed by the department of financial services (DFS) under the finance ministry, found full agreement in the meeting which was attended by top finance ministry officials besides the CBI, Intelligence Bureau (IB), Serious Frauds Investigation Office, SEBI, and top police officials of the states affected by such illegal financial frauds like West Bengal, Odisha, Andhra Pradesh, etc.

Sinha is learnt to have said during the meeting that such a body can devise a coordinated and comprehensive strategy to deal with the illegal activity besides quantifying the scale and scope, and that it can also point out the systematic risks posed to the country’s financial system by such frauds.