Finance Ministry working with MeitY, RBI to clamp down on ponzi apps: Nirmala Sitharaman

Union Minister Nirmala Sitharaman on Sunday mentioned the finance ministry is working with MeitY and RBI to clamp down on ponzi apps to stop them from taking away hard-earned cash of gullible traders. Cautioning traders in opposition to ponzi apps, Sitharaman mentioned traders ought to do their due diligence and shouldn’t be lured by claims of profitable returns made by them.

“There are also apps which are coming out and reaching out to people saying we can do this, we can do that. Your money will fetch you this much.

“Many of them are ponzi, the apps on which we’re working with the Ministry involved, the Ministry of Electronics & Information Technology (MeitY) and with the Reserve Bank and clamping down on them like by no means earlier than, in order that we do not get these ponzi apps, taking away hard-earned cash,” she said.

Speaking at the Thinkers Forum at Tumakuru (Karnataka), she said, social influencers and financial influencers are all out there but a strong sense of caution is required in each one of us to make sure we do double checking, counter checking, don’t go as a flock into something and therefore protect hard-earned money.

Asked about regulating social influencers and financial influencers, she said, “I’m not having any proposal earlier than me for regulating them at this stage.”

Asserting that investors should be cautious of influencers, she said if there are three or four people giving us very objective good advice, there may be seven others out of 10 who are probably driven by some other considerations.

In 2019, the federal government enacted a legislation referred to as the Banning of Unregulated Deposit Schemes Act, 2019, which seems to stop unregulated entities from amassing deposits and duping the poor and gullible of their hard-earned financial savings. As per the Act, any deposit taker who solicits deposit in contravention of Section 3, shall be punishable with imprisonment of not lower than one yr and as much as 5 years.

As per the legislation the primary declare on the recovered cash shall be of depositors and the proposed laws additionally has some exclusion together with cash collected by actual property corporations and from mates and family members.

It seeks to assist deal with the menace of illicit deposit-taking actions within the nation, which at current are exploiting regulatory gaps and lack of strict administrative measures to dupe poor and gullible individuals of their hard-earned cash, in line with the federal government.

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