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IMG to control fraudulent ponzi scheme

The IMG has been set up through the Department of Financial Services, under the Finance Ministry

May 08, 2013 12:39 IST | India Infoline News Service
The Finance Ministry on Monday said that it has set up an inter-ministerial group to suggest ways to tackle fraudulent money pooling activities and protect the interest of investors, according to a media report.

The IMG has been set up through the Department of Financial Services, under the Finance Ministry.

The members of IMG will include representatives from the Finance and Corporate Affairs Ministries, Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI), the report added.

A ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors. The Ponzi scheme generates returns for older investors by acquiring new investors.

This scam actually yields the promised returns to earlier investors, as long as there are more new investors. These schemes usually collapse on themselves when the new investments stop. 

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