Scam Con­trol Mea­sures

Consumer Voice - - Bfsi -

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.

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