 "Ponzi scheme frauds to be curbed with new law soon")
The government will soon introduce a new law to protect gullible investors from Ponzi scheme frauds unleashed by entities running illicit deposit schemes in the name of multi-state cooperative societies.
The new law would be formed in consultation with various stakeholders, as part of 'Clean India' agenda, Finance Minister Arun Jaitley said in his Budget speech.
"There is an urgent need to protect the poor and gullible investors from another set of dubious schemes, operated by unscrupulous entities who exploit the regulatory gaps in the Multi-State Cooperative Societies Act (MSCS Act), 2002," he said.
The draft bill to curtail the menace of illicit deposit schemes has been placed in the public domain and will be introduced shortly after its finalisation.
Markets regulator Sebi and Reserve Bank of India (RBI) have been pitching for amendments in the MSCS Act after several Ponzi schemes resurfaced.
MSCS is a credit society which operates in more than one state and has a minimum of 50 members in one state.
After the Saradha bubble burst in April, 2013, several Ponzi schemes had to wind up operations as central and state agencies cracked the whip amid protests by lakhs of defrauded investors.