Lok Sabha Question No. 1952 (UNSTARRED), answered on 2022-12-19
Subject: SHRI GNANATHIRAVIAM S
Ministry: FINANCE
Asked by: S. Gnanathiraviam

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA UNSTARRED QUESTION NO. 1952

ANSWERED ON MONDAY, 19 th  DECEMBER, 2022/ AGRAHAYANA 28, 1944 (SAKA)

## FRAUD FINANCIAL COMPANIES

## 1952.  SHRI GNANATHIRAVIAM S.:

Will the Minister of FINANCE be pleased to state:

- a)    whether  some  private  companies  in  the  country  especially  in  Tamil  Nadu  are  trapping people on the pretext of doubling/increasing their money;
- b)    if so, the details thereof;
- c)   whether  the  Government  is  aware  of  such  fraud  companies  and  if  so,  whether  the Government has taken any action against these companies and helped people in recovering their money; and
- d)    if  so,  the  details  thereof  including  the  amount  usurped  by  these  companies  and  name  of these companies, State-wise?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (DR. BHAGWAT KARAD)

- (a) to (d): As per information received from enforcement agencies and regulatory bodies, following are the details:
-  Central Bureau of Investigation (CBI) :  CBI has registered 102 cases during the years 2019, 2020, 2021 and 2022 (up to 30.11.2022) involving 135 private companies/ firms/ individuals in the country for trapping people on the pretext of doubling/ increasing their money. The Statewise details of cases registered by CBI are as follows:
-  Reserve  Bank  of  India  (RBI) :  State  Level  Coordination  Committee  (SLCC)  is  a  joint  forum formed in all States to facilitate information sharing among the regulators viz. RBI, SEBI, IRDA, NHB, PFRDA, Registrar of Companies (RoCs) etc. and Enforcement Agencies of the States viz Home  Department,  Finance  Department,  Law  Department,  Economic  Offences  Wing  (EOW) etc.,  with  the  objective  to  control  the  incidents  of  unauthorized  acceptance  of  deposits  by unscrupulous entities. 5 cases of entities promising high investment returns were discussed in

| SN   | Name of State             | No. of cases registered                                        |
|------|---------------------------|----------------------------------------------------------------|
| 1    | Jharkhand                 | 05                                                             |
| 2    | Karnataka                 | 01                                                             |
| 3    | Kerala                    | 01                                                             |
| 4    | New Delhi                 | 03                                                             |
| 5    | Tripura                   | 03                                                             |
| 6    | West Bengal               | 88                                                             |
| 7    | Madhya Pradesh Tamil Nadu | 01 (CBI has registered 01 case against 05 different companies) |
|      | Total cases               | 102                                                            |

Note: There are instances where one company has operated in more than one State.

the  State  Level  Coordination  Committee  (SLCC)  meetings  in  the  State  of  Tamil  Nadu  from 01.01.2022 to 30.11.2022.

-  Securities  and  Exchange Board of India  (SEBI) :  Complaints from investors, alleging  illegal mobilization of funds under the pretext of high assured returns, are examined by SEBI in terms of fulfillment of the conditions as specified in section 11AA of the SEBI Act, 1992. Any scheme mobilizing  funds  has  to  fulfill  certain  conditions  to  be  called  upon  as  a  Collective  Investment Scheme (CIS)  under  SEBI  (CIS)  Regulations,  1999.  The  number  of  complaints  examined  by SEBI during the last 3 years region-wise in terms of SEBI's regional offices are as follows:
-  Enforcement action against 44 private companies across the country (including 6 from the State of  Tamil  Nadu)  for  defrauding  gullible  investors  on  the  pretext  of  doubling/  increasing  their money, has been reported by the Ministry of Corporate Affairs (MCA) .

| Financial Year           | Regional Offices (ROs) of SEBI   | Regional Offices (ROs) of SEBI   | Regional Offices (ROs) of SEBI   | Regional Offices (ROs) of SEBI   | Head Office (HO)   | Total   |
|--------------------------|----------------------------------|----------------------------------|----------------------------------|----------------------------------|--------------------|---------|
|                          | South                            | North                            | West                             | East                             |                    |         |
| 2020-21                  | 9                                | 72                               | 6                                | 12                               | 32                 | 131     |
| 2021-22                  | 10                               | 27                               | 5                                | 17                               | 9                  | 68      |
| 2022-23 (upto Nov, 2022) | 24                               | 36                               | 12                               | 27                               | 36                 | 135     |

In order to tackle the menace of illicit deposit taking schemes which dupe people of their hard-earned savings, and to protect the interests of people, the following steps have been taken:

-  The Banning  of  Unregulated  Deposit  Schemes  Act,  2019  has  been  enacted  by  the  Central Government. The Act contains comprehensive provisions in this regard prohibiting promoting, operating, issuing advertisements or accepting deposits in any Unregulated Deposit Scheme.
-  29  States  /  Union  Territories  have  passed  Protection  of  Interest  of  Depositors  (PID)  Acts  for taking action against entities collecting money from the public illegally.
-  Through RBI's online portal SACHET (https://sachet.rbi.org.in), which was initially launched on 04.08.2016,  the  public  is  cautioned  against  fraudulent  schemes/  entities.  From  the  portal, members  of  the  public  can  obtain  information  regarding  entities  that  are  allowed  to  accept deposits, whether the entity  is  registered  with any  regulator,  lodge complaints and also share information regarding illegal acceptance of deposits by unscrupulous entities.