Harish Gupta
New Delhi, Aug. 16
The Modi government has declared a virtual war against hundreds of Ponzi schemes which have been in operation in various states.
If the Directorate of Enforcement has registered 57 cases under the Prevention of Money Laundering Act, 2002 (PMLA), the Central Bureau of Investigation (CBI) has also registered 65 cases during 2014-15 relating to Collective Investment Scheme, Chit Funds, etc.
The Ministry of Corporate Affairs has assigned 139 cases pertaining to so called chit fund companies to Serious Fraud Investigation Office (SFIO) for investigation. Investigations reveal that these companies were operating mostly in the Eastern and North-Eastern States of the country. A Computer Forensic Lab has been set up in SFIO for analysing the database of the companies under investigation.
Interestingly, during the UPA regime only 7 complaints were registered with the CBI until 2013. But the number shot up to 65 during 2014 & 2015 until June.
The ED has attached assets worth Rs. 1133.25 crores and prosecution has been launched in three cases under the PMLA.
The government has set up a high level Inter-Ministerial Group (IMG) to plug loopholes in the existing regulatory framework for deposit as these Chit Fund companies are outside the regulatory purview of Reserve Bank of India (RBI). These Chit Funds are registered, regulated, supervised and governed by Chit Fund Act, 1982, which is administered by the respective State Governments.
The crack down that began with the SEBI action against the Sahara group involves large number of influential persons in West Bengal, Jharkhand, North Eastern states, Odisha and other states.
The SEBI has already issued directions that funds so collected by these companies must be returned to the small depositors. Since SEBI has been given wide powers of investigation, prosecution and regulate collection of funds under the amended Act, it has issued directions to the so-called Chit Fund companies to refund funds so collected within a limited time-frame.
In addition to all these steps, the Finance Ministry has constituted a high level Inter-Ministerial Group (IMG) for identifying gaps in the existing regulatory framework for deposit taking activities by these companies.
The coordinating mechanism has been extended to states and each one has set up State Level Coordination Committee (SLCC) for greater coordination between RBI, SEBI and other enforcement agencies. SLCC had been reconstituted in May, 2014 after Modi came to power to ensure regular participation of senior functionaries and to facilitate cohesive and effective information sharing amongst the participants.
The frequency of the meetings has also been increased, which are now being conducted on quarterly intervals as against half-yearly earlier.
Harish Gupta is the National Editor of Lokmat Group
New Delhi, Aug. 16
The Modi government has declared a virtual war against hundreds of Ponzi schemes which have been in operation in various states.
If the Directorate of Enforcement has registered 57 cases under the Prevention of Money Laundering Act, 2002 (PMLA), the Central Bureau of Investigation (CBI) has also registered 65 cases during 2014-15 relating to Collective Investment Scheme, Chit Funds, etc.
The Ministry of Corporate Affairs has assigned 139 cases pertaining to so called chit fund companies to Serious Fraud Investigation Office (SFIO) for investigation. Investigations reveal that these companies were operating mostly in the Eastern and North-Eastern States of the country. A Computer Forensic Lab has been set up in SFIO for analysing the database of the companies under investigation.
Interestingly, during the UPA regime only 7 complaints were registered with the CBI until 2013. But the number shot up to 65 during 2014 & 2015 until June.
The ED has attached assets worth Rs. 1133.25 crores and prosecution has been launched in three cases under the PMLA.
The government has set up a high level Inter-Ministerial Group (IMG) to plug loopholes in the existing regulatory framework for deposit as these Chit Fund companies are outside the regulatory purview of Reserve Bank of India (RBI). These Chit Funds are registered, regulated, supervised and governed by Chit Fund Act, 1982, which is administered by the respective State Governments.
The crack down that began with the SEBI action against the Sahara group involves large number of influential persons in West Bengal, Jharkhand, North Eastern states, Odisha and other states.
The SEBI has already issued directions that funds so collected by these companies must be returned to the small depositors. Since SEBI has been given wide powers of investigation, prosecution and regulate collection of funds under the amended Act, it has issued directions to the so-called Chit Fund companies to refund funds so collected within a limited time-frame.
In addition to all these steps, the Finance Ministry has constituted a high level Inter-Ministerial Group (IMG) for identifying gaps in the existing regulatory framework for deposit taking activities by these companies.
The coordinating mechanism has been extended to states and each one has set up State Level Coordination Committee (SLCC) for greater coordination between RBI, SEBI and other enforcement agencies. SLCC had been reconstituted in May, 2014 after Modi came to power to ensure regular participation of senior functionaries and to facilitate cohesive and effective information sharing amongst the participants.
The frequency of the meetings has also been increased, which are now being conducted on quarterly intervals as against half-yearly earlier.
Harish Gupta is the National Editor of Lokmat Group
