The government is mulling the idea of setting up a central agency empowered to examine schemes to prevent systematic financial swindle of savings of thousands of gullible small depositors as a multi-agency probe into the activities of Kolkata-based Saradha group of companies in a scandal involving thousands of crores of rupees gathered steam.
The central agency could be empowered to examine the scheme in its early stages on the basis of initial complaints, media reports, suspicious transaction reports filed by the Financial Intelligence Unite (FIU) and the inputs from state and central intelligence agencies.
Unlike China’s anti-pyramid statutes and Singapore’s Multi Level Marketing (MLM) and Pyramid Selling (Prohibition) Act, India does not have any such central legislation, although 14 states have passed special Acts to deal with MLM companies.
The issue was discussed at a recent inter-ministerial meeting which was attended by senior officers from the Intelligence Bureau, Central Economic Intelligence Bureau, RBI and Enforcement Directorate among others.
The department of financial services is also likely to come with a new set of guidelines to ensure there is clarity in the implementation of Prize Chits and Money Circulation Schemes (Banning) Act, 1978 or the PCMCS (B) Act, said a source requesting not to be identified.
The economic offences wings of state police forces are not clear about how to implement the Act, and hence the new guidelines.
A collective investment scheme (CIS), the ones that West Bengal’s Saradha group was carrying out, typically raises funds from the public to invest the money in a project and the returns are shared at a later stage.
Saradha case: CBI may soon step in
Kolkata: The affairs of the tainted Saradha Group may soon be probed by the CBI.
Though the state has not referred the case to the agency, a number of public sector banks are set to file complaints against the group. For financial forgeries involving R3 crore and above, a bank has to file a complaint with the police and report the matter to the RBI. The RBI, in turn, refers the matter to the economic offences wing of CBI.
The Saradha Group and its directors had allegedly taken loans from multiple banks mortgaging the same property. They also allegedly opened fake accounts in multiple banks for illegal transactions. HTC