Scam Control Measures
In early 2014, when Saradha Scam affected hundreds of small investors, the government constituted an interministerial group to strengthen the regulators. It introduced an ordinance to give more powers to market regulator SEBI to regulate illegal collective investment schemes. SEBI was given powers to regulate any pooling of funds under an investment contract having a corpus of Rs 100 crore or more, and attach assets in case of non-compliance. The SEBI chairman was also given powers to authorize search-and-seizure operations as part of efforts to crack down on ponzi schemes. The finance ministry had set up an advisory group around three years ago to suggest changes to the Chit Funds Act, 1982. The committee has said that there should be a common registrar for each state. The group has also recommended that there be a provision for insurance coverage in case of default by the foreman (the company or the person running the chit fund) so that the interest of investors is protected.