Central Bank and Police must act before it is too late
‘Finance Minister Basil Rajapaksa has already sent a note to relevant govt authorities regarding 40% mandatory investment in entrepreneurship development from next budget’ ‘In discussion with e-commerce platforms and supermarket chains to boost entrepren
Speaking to Daily Mirror, Minister of Youth & Sports, Minister of Development Co-ordination and Monitoring, and State Minister of Digital Technology and Enterprise Development Namal Rajapaksa said The Central Bank of Sri Lanka and Sri Lanka Police must take action to regulate illegal pyramid schemes before it is too late.
“When there is a report that someone is misusing or misguiding the people about their investment portfolio, then the Central Bank and Sri Lanka Police must act. If they don't regulate now, once the society is being flooded with these, then the new regulations will not help anyone,” Minister Rajapaksa said.
Minister Rajapaksa opined that without taking legal action against such scammers, sometimes even the exact officials in those investigations had started investing in those schemes.“my personal opinion is yes we need changes in the law. But, the existing law is enough to prevent these schemes,” he said.
In an investigative piece titled ‘Unmasking Sri Lanka's Pyramid Parasites', the Daily Mirror last week revealed how illegal pyramid schemes are spreading through the country especially after the pandemic, targeting the youth.
A “Pyramid Scheme” is defined by the Central Bank as a scheme under which a person makes a payment to get the right to recruit others into the scheme for which he receives an income.the new recruits also make payments to get the right to further recruit others and in turn receive incomes for such recruitment. Such schemes are illegal in Sri Lanka under the Banking Act No.30 of 1988.
Earning money by conning the weak and selling them a dream of passive income through an illegal pyramid isn't entrepreneurship. When asked about the harm that such “get rich quick” pyramid schemes does for entrepreneurship among the young generation, Minister Rajapaksa said educational reforms and more awareness on fiscal management for the young generation is a must.
“Even though Sri Lanka has a really good education system, it only caters to certain segments. As a result, the knowledge of fiscal management of kids is much less than the rest of the world. They gain experience through mistakes and as a result, the cost has become very high. Many people invest in wrong people and wrong financial institutions.”
Sharing his plans and future programmes planned to promote entrepreneurship, he said; “we should also introduce new innovative investment opportunities as there is blockchain industry, cryptocurrency. As the Youth Affairs Ministry, we will be looking into this area by coordinating with the Central Bank and other relevant government institutions.” He claimed that as a part of next budget's plan, Finance Minister Basil Rajapaksa had already sent a note to relevant authorities, departments, and government politicians to do at least 40% mandatory investment in entrepreneurship development.
“Each Grama Sewaka Vasama will get Rs. 3 million each, out of which 40% will be the minimum investment for entrepreneurship development. At the same time, from my ministry, I am coordinating with 10 other state ministries to promote entrepreneurs in order to create opportunities and also create a market for them. At the moment, we are in discussion with some e-commerce platforms to come and assist us. We will also be talking to supermarket chains to see how they can bring these products into their networks,” he added.