House panel moots cover for collective investment schemes

To curb Ponzi activity, a Parliamentary panel has suggested deposit-linked insurance cover for collective investment schemes as well as capping of commission paid to agents soliciting money from investors. The suggestions came against the backdrop of increasing instances of people getting duped by investment schemes. In its report, the Parliamentary Standing Committee on Finance has said one of the major factors for unauthorised money mobilisation could be attributable to the high rates of commission paid to the agents, who in turn go all-out to lure gullible public, particularly in non-metro areas. "Thus, with a view to discouraging this trend and dis-incentivising the same, the committee would recommend that payment of commission to agents may be legally capped at a nominal rate of, say, two per cent," it noted.