 "UP among few states yet to implement anti-ponzi law: Sebi")
Terming financial education and investor awareness a must to check the ponzi menace, regulator Sebi's Chairman U K Sinha has expressed concern that some states including Uttar Pradesh are yet to enact the law aimed at protecting the depositors' money.
The Sebi chief further said that Uttar Pradesh, despite being the country's largest state in terms of population, also fares very badly in terms of financial inclusion and in terms of penetration of authorised investment products like mutual funds.
The comments assume significance in the wake of a number of unauthorised investment schemes, including those offered by the Sahara group, have been found to have mushroomed in the state for many years.
While the Securities and Exchange Board of India (Sebi) Chairman did not name any entity engaged in such unauthorised pooling of money from investors, he said that investor awareness was a must to keep a check on such activities, through the government and regulators have taken a number of measures in this regard.
Addressing a seminar on financial education and investor awareness here, Sinha said that a lot of coordination is required among various agencies to check investment frauds.
"For that purpose, the Reserve Bank of India has started this concept of state-level coordination committee. This committee is headed by the State Chief Secretary and it meets every three months.
"The committee looks into every complaint, media reports, and other information that comes to its notice about money being collected in unauthorised manner or suspected to be unauthorised manner. Then it decides which agency will look into the particular matter," Sinha said.
"Since we created this mechanism last year, the instances of new efforts have come down substantially," he said, while adding that many states have also passed a law, which is called the State Depositors Protection Act, to check this menace.
Sinha said that as many as 20 states, including Maharashtra and Tamil Nadu, have enacted this law and the District Magistrate and other authorities can act whenever there is an instance of unauthorised money collection.
"However, Uttar Pradesh is yet to enact that. We have been requesting the state government that they should also enact the State Depositors Protection Act," he said.
Sinha further said that the chances of individuals getting trapped into unauthorised schemes become very high if there is not enough financial education.
The Sebi chief further said that Uttar Pradesh, despite being the country's largest state in terms of population, also fares very badly in terms of financial inclusion and in terms of penetration of authorised investment products like mutual funds.
The comments assume significance in the wake of a number of unauthorised investment schemes, including those offered by the Sahara group, have been found to have mushroomed in the state for many years.
While the Securities and Exchange Board of India (Sebi) Chairman did not name any entity engaged in such unauthorised pooling of money from investors, he said that investor awareness was a must to keep a check on such activities, through the government and regulators have taken a number of measures in this regard.
Addressing a seminar on financial education and investor awareness here, Sinha said that a lot of coordination is required among various agencies to check investment frauds.
"For that purpose, the Reserve Bank of India has started this concept of state-level coordination committee. This committee is headed by the State Chief Secretary and it meets every three months.
"The committee looks into every complaint, media reports, and other information that comes to its notice about money being collected in unauthorised manner or suspected to be unauthorised manner. Then it decides which agency will look into the particular matter," Sinha said.
"Since we created this mechanism last year, the instances of new efforts have come down substantially," he said, while adding that many states have also passed a law, which is called the State Depositors Protection Act, to check this menace.
Sinha said that as many as 20 states, including Maharashtra and Tamil Nadu, have enacted this law and the District Magistrate and other authorities can act whenever there is an instance of unauthorised money collection.
"However, Uttar Pradesh is yet to enact that. We have been requesting the state government that they should also enact the State Depositors Protection Act," he said.
Sinha further said that the chances of individuals getting trapped into unauthorised schemes become very high if there is not enough financial education.