As various ponzi schemes and illegal multi-level marketing activities continue to defraud investors, the Government is considering setting up a central agency to probe such cases and to coordinate with other central and state-level enforcement agencies.

The Department of Financial Services has circulated draft amendments to the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, to the various law and enforcement agencies for their views, while suggestions from various agencies are now being considered, official sources said.

CEIB proposals

Stressing on the need for a central agency, the Central Economic Intelligence Bureau has said that these schemes manifest themselves in violation of various regulations and therefore, a central agency is required to coordinate with various agencies working under different statutes.

It has also suggested empowering the proposed agency to take up for investigation those cases that may have taken place in different states and even outside the country.

Prevention of Money Laundering Act

The CEIB, nodal agency in the Finance Ministry for gathering and disseminating intelligence related to financial crimes, has also recommended having a provision to declare offences related to ponzi schemes under the Prevention of Money Laundering Act (PMLA).

These and other suggestions by the law and enforcement agencies are being vetted by the Department of Financial Services, they said.

Multi-level marketing

The matter to check multi-level marketing scheme had come up for discussion at a recent meeting of the Economic Intelligence Council, a high-level panel headed by Finance Minister P. Chidambaram to discuss intelligence sharing and other issues related to financial crimes.

The move to create a central agency to check MLM or ponzi schemes assumes significance in the wake of multi-crore Saradha scam and other such cases.

Related Topics