Sebi hopeful that ponzi scheme menace would be contained

Sebi chairman U K Sinha today said the ponzi scheme menace would be contained with the formation of state-level coordination committees comprising representatives of RBI, chief secretaries and the capital markets regulator itself.
"The state-level coordination committee of RBI, Sebi and the chief secretaries of the state government formed by the government is expected to contain the ponzi menace", Sinha said at a seminar here today.
He said that the problem of tackling the menace arose due to the multiplicity of agencies which were looking into it.
"RBI, Sebi, Ministry of Corporate Affairs and certain legislations were involved in dealing with these ponzi firms which created the problem," he said.

With the government realising this, three ordinances had been promulgated and the Sebi Act had been amended in July, 2014.
For money collected beyond Rs 100 crore through collective investment schemes (CIS), Sebi is authorised to legally deal with them, he said.
For collections below Rs 100 crore, state governments, which had passed their own depositors protection acts, would deal with those entities.
The problem created by these firms raising money through CIS came to the fore in the eastern region due to the high propensity of the people to park funds with them.