New Delhi: An inter-ministerial group formed to suggest steps to deal with ponzi and Saradha type of schemes, which rob investors of their hard-earned money, discussed ways to strengthen the regulatory framework at its first meeting on Thursday.
The IMG, headed by the Department of Financial Services Additional Secretary, is reported to have discussed gaps in the regulatory mechanism to deal with collective investment schemes.
It also deliberated on strengthening the existing coordination mechanisms for regulation and supervision of the financial sector.
Yesterday, Finance Minister P Chidambaram had said there are regulatory gaps and efforts are being made to frame a new law to oversee the financial sector.
"The present arrangements have a number of gap areas, where no regulators are unambiguously in-charge, such as issue of regulatory oversight over diverse Ponzi schemes that we have discovered recently. These are cleverly designed to be out of the purview of regulatory agencies," he had said.
The IMG comprises of Joint Secretary level officers from Department of Economic Affairs, Department of Revenue, Corporate Affairs Ministry, RBI and SEBI.
The panel has been set up to ensure "proper enforcement of regulatory framework for multi-level marketing companies, non-banking finance companies and companies running collective investment schemes".
The Yashwant Sinha headed Standing Committee on Finance last week had pressed for blanket ban on investment schemes promising unreasonable returns and demanded a single regulator to oversee their functioning or scrapping them altogether, sources said.
He had suggested that the 1982 Act regulating chit fund business in the country be repealed through an ordinance, they said.
Many entities have registered themselves as chit funds but are found to be raising money illegally through fraudulent schemes or ponzi schemes by promising high returns.
The IMG was set up against the backdrop of the collapse of Kolkata-based Saradha Group that had allegedly duped lakhs of investors of their hard-earned savings totalling thousands of crores of rupees.
First Published: Thursday, May 23, 2013, 19:56