Lawmakers on Thursday quizzed officials of the Reserve Bank of India (RBI), the Securities and Exchange Board of India (Sebi) and the government about the steps being taken to avoid recurrence of fraudulent money-pooling activities such as the Saradha scam.
The meeting of the parliamentary standing committee on finance comes against the backdrop of the Central Board of Investigation (CBI) probing the Saradha scam in which thousands of crores of rupees were swindles from investors in West Bengal and neighbouring states.
Headed by Congress leader and former Union minister Veerappa Moily, the panel deliberated on the efficacy of regulation of collective investment schemes and chit funds, among others.
The committee, whose members include former prime minister Manmohan Singh, held discussions for more than two hours. It would meet again on September 25, sources said.
Officials from finance and corporate affairs ministries, as well as from RBI and Sebi, made presentations before the members. Sources said the members asked officials about the reasons for mushrooming of fraudulent investment schemes and why they go unchecked.
The Serious Fraud Investigation Office (SFIO) has submitted its final investigation report to the government, which may soon start prosecution proceedings for numerous serious violations found during investigations. The SFIO probe was ordered by the corporate affairs ministry in April 2013.
Sources further said some of the members reportedly raised the issue of a single regulator for the entire financial sector to ensure better co-ordination.
The members pointed out that despite so many regulators Ponzi schemes were still happening in different parts of the country.
Earlier, the standing committee had issued notices to the finance ministry, corporate affairs ministry, RBI and Sebi to provide details on chit funds and Ponzi schemes. It will also review performance of the regulatory bodies like Sebi, SFIO, CCI and Irda.
Recently Sebi has been empowered to act against entities running illegal schemes that are worth Rs 100 crore or more.
Besides, various regulators as well as state governments have been taking steps to check the Ponzi menace.
