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Government panel suggests campaign against MLM, pyramid and ponzi schemes

The inter-ministerial committee also suggested framing of fresh guidelines on the nature of operation of the direct selling and MLM companies

 
New Delhi: A government panel has suggested running a public campaign under the flagship consumer awareness programme 'Jago Grahak Jago' to guard the gullible investors against multi-level marketing (MLM) and pyramid structure companies collecting money through ponzi schemes, reports PTI.
 
The recommendation has been made by the inter-ministerial committee, headed by Consumer Affairs Secretary and comprising of members from Reserve Bank of India (RBI), Finance Ministry, Corporate Affairs Ministry and Law Ministry among others, sources said.
 
The panel has suggested that this consumer awareness programme can be used to make the public aware about pitfalls of ponzi schemes, which typically involves collection of money from public in different layers with promise of rising returns with every new investors added to the scheme.
 
The committee has also suggested framing of fresh guidelines on the nature of operation of the direct selling and MLM companies so that genuine companies are differentiated from those taking the investors and general public for a ride.
 
Department of Financial Services is currently examining formulation and issuance of guidelines for such firms under the Prize Chit and Money Circulation Schemes (Banning) Act, 1978, which will be circulated among the concerned ministries for their views once it is completed, sources said.
 
The department will also consult market regulator SEBI while framing the guidelines, they added.
 
The committee was constituted in July this year by the Consumer Affairs ministry, after it received complaints regarding alleged large scale frauds by multi level marketing companies, which included defaults in payments and operators disappearing with the money collected from public.
 
The committee was mandated to examine the complex issues related to the working of such firms, fill the regulatory gaps and suggest measures to safeguard the interests of the consumers.
 

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COMMENTS

MOHAN

4 years ago

sooner the better

Tata AIA, Reliance Life witness sharp fall in premium collection

Premium collected by private sector life insurance companies during the first half of current fiscal declined to Rs32,423 crore from Rs35,059 crore in same period last year

 
New Delhi: Tata AIA and Reliance Life witnessed steepest decline in the collection of life insurance premium during the six-month period ending September 2012, reports PTI.
 
The total premium collected by Tata AIA Life Insurance during April-September 2012 declined by 29.55% followed by Reliance Life Insurance at 28.62%, Minister of State for Finance Namo Narain Meena said in written reply.
 
"The reasons for a negative growth in the premium collections are various factors that are influencing the financial sector as a whole", the Minister said, adding the 23 private sector life insurance companies collectively witnessed 8.13% decline in premium collection.
 
The lone public sector player Life Insurance Cor of India (LIC) fared much better than its private sector peers, by recording only a marginal decline of 0.18% in premium collection during the six-month period.
 
The other private sector insurance companies which have witnessed significant fall in premium collection were SBI Life (23.97%), Birla Sun Life (15.56%), Shriram Life (14.6%), Sahara Life (12.94%) and Future Generali Life Insurance (12.60%).
 
The figures provided by the Minister revealed that premium collected by the private sector life insurance companies during the first half of the current fiscal declined to Rs32,423 crore from Rs35,059 crore in the corresponding period a year ago.
 
LIC collected a premium of Rs87,780 crore, down marginally from Rs87,937 crore in the six-month period of the previous fiscal, the minister said quoting figures.
 

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