RBI or Sebi should campaign against ponzi schemes: SBI

Shadow banking business in India at over $670 billion: Financial Stability Board

Written by Press Trust Of India | Kolkata | Published: May 19, 2013 1:10:24 am

In the backdrop of the chit fund scam,the State Bank of India today said Reserve Bank of India or Securities and Exchange Board of India should take up major campaigns to create awareness among investors being lured to ponzi schemes.

“RBI…or Sebi should begin a major campaign in line with Jago Grahak Jago,woolmark or hallmark (gold) to create awareness among the investors about these ponzi schemes,” SBI chairman Pratip Chaudhuri said on the sidelines of a banking summit.

The West Bengal based Saradha Group has been accused of duping investors of their savings running into thousands of crores of rupees.

On shadow banking system,he said it seemed to have more flexibility than in traditional banking set-up.

As per a report released today by Switzerland-based Financial Stability Board,the shadow banking business in India is estimated at over $670 billion (nearly Rs 37 lakh crore) and accounted for about one per cent of the worldwide total.

For banks,minimum deposit was seven days,while the shadow banking system allowed even one day deposit,he said.

Shadow banking system is generally referred to involvement of financial intermediaries in aiding credit creation without regulatory oversight.

Chaudhuri said banks needed to do more in terms of penetration “when we have less banking footprint with low branch and ATM coverage.”

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