Govt plans law to check Ponzi schemes, says Chidambaram
Concerned over the rising menace of ponzi schemes, the government will bring in a new law to remove regulatory gaps in this regard, finance minister P Chidambaram has said.business Updated: Jul 08, 2013 02:56 IST
Concerned over the rising menace of ponzi schemes, the government will bring in a new law to remove regulatory gaps in this regard, finance minister P Chidambaram has said.
“We are considering a law to fill the regulatory gap... We are trying to see that people do not take advantage of the regulatory gaps,” he said.
It was currently possible for companies to set up their illicit investment schemes in such a way so that they can avoid oversight by regulators or government departments.
“Right now, its possible to design your company in such a manner and carry on your business in a way that you do not classify as an non-banking finance company, a chit fund, or any other regulated entity,” the finance minister said.
“These are regulatory gaps and what we are trying to do is to reduce these gaps to maximum possible extent,” he added.
Ponzi schemes, named after Charles Ponzi of the US, are fraudulent investment operations. They lure investors with promise of high returns, and pay the returns from the money brought in by subsequent investors.
On the issue of spectrum auction, Chidambaram said he was unsure if the Rs 40,847-crore target for the current fiscal will be met.