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Concerned over the rising menace of ponzi schemes, the government will bring in a new law to remove regulatory gaps in this regard, Finance Minister P Chidambaram has said.
"We are considering a law to fill the regulatory gap... We are trying to see that people do not take advantage of the regulatory gaps," he said.
The Minister said that it was presently possible for the companies to set up their illicit investment schemes in such as way so that they can avoid oversight by either of the regulators or the government departments.
"Right now, its possible to design your company in such a manner and carry on your business in a way that you do not classify as an NBFC, a chit fund, or any other regulated entity," Chidambaram told PTI in an interview here.
"These are regulatory gaps and what we are trying to do is to reduce these gaps to maximum possible extent, so that everyone falls either under the RBI, or Sebi, or the Registrar of Chits or under the state government, etc," he said.
The comments come in the wake of wide-ranging amendments proposed by the government to the Sebi Act and other regulations to give the capital markets regulator greater powers to deal with various kinds of investment schemes.
Asked whether the government would consider bringing in an ordinance for these amendments, Chidambaram said: "At the movement, we are considering a law. Now, what shape the law will take, I cannot say. That will depend on when the Parliament meets, among other factors."
A Cabinet note on a proposed Securities Laws (Amendment) Bill, 2013, has been circulated by the Department of Economic Affairs to other departments in the Finance Ministry, as also to the Corporate Affairs, Home, Law and Telecom ministries, along with to the Reserve Bank of India (RBI), Planning Commission and the Prime Minister's Office.
