Finance Ministry Collaborates with MeitY and RBI to Clamp Down on Ponzi Apps, says Nirmala Sitharaman

Nirmala Sitharaman, the Union Finance Minister, announced on Sunday that the Ministry of Finance is collaborating with MeitY (Ministry of Electronics & Information Technology) and RBI (Reserve Bank of India) to clamp down on ponzi apps and prevent them from defrauding gullible investors of their hard-earned money.

During her address at the Thinkers Forum in Tumakuru (Karnataka), Sitharaman urged investors to exercise caution and conduct their due diligence before investing in such apps. She warned against being lured by claims of attractive returns made by ponzi apps.

She added that the government is working with concerned ministries to clamp down on these fraudulent apps and protect the interests of investors. Sitharaman emphasized the importance of double-checking and counter-checking before making any investment decisions.

Sitharaman also discussed the role of social influencers and financial influencers, noting that while they can offer objective advice, investors must exercise caution and not blindly follow their recommendations.

The government had previously enacted the Banning of Unregulated Deposit Schemes Act in 2019, which seeks to prevent unregulated entities from collecting deposits and duping people of their hard-earned savings.

The Act imposes strict penalties, including imprisonment of not less than one year and up to five years, on deposit takers who solicit deposits in violation of Section 3. It also provides for the recovery of deposits and ensures that the first claim on the recovered money is of depositors.

The proposed legislation seeks to combat the menace of illegal deposit-taking activities that exploit regulatory loopholes and the lack of strict administrative measures to defraud unsuspecting people.