It also recommended amending the rules to provide ‘appropriate penalties’ to newspapers, as well as celebrities that ended fraudulent deposit schemes.
A parliamentary panel has pulled up state governments for “a lax and obstinate attitude” in implementing the law “banning uncontrolled deposit schemes”, while providing “appropriate penalties” to newspapers as well as celebrities It is also recommended to amend the rules. Supports fake deposit schemes.
In its report on ‘Abolition of Unregulated Deposit Schemes, 2020’ tabled in Parliament on Wednesday, the committee headed by Member of Parliament Pratap Singh Bajwa noted that there was a lot of discord by the states and union territories to implement the rules. It was disappointing. .
Hence the committee recommends this ministry [of finance] Its enforcement mechanisms should be strengthened to ensure that the objectives of the regulations, which have a broad impact on the public interest, are attained in letter and spirit.
It recommended the formation of a committee / group of experts headed by a senior bureaucrat or some renowned expert / economist, who would have sound knowledge in financial matters to monitor and report on the implementation of these matters or to make recommendations about problems and Have a background. Encountered in implementation.
Just punishment
Saying that it is important that only such schemes were advertised which were prima facie and passed due diligence test, the committee recommended that the Act / Rules should be amended so that the appropriate penalty is not civil, criminal. , Newspapers and other publications from providing any kind of support for fake deposit schemes.
In terms of celebrity endorsement, the committee stated that they played a key role in increasing awareness and visibility about a particular product / service, therefore influencing customers’ choice in deciding on that particular product / service.
Welcoming the provision in the law for such celebrities to ensure that the claims made in his support were not misleading, the committee said that “deep-pocketed celebs often receive millions and crores in return for their support.” They charge a huge amount. Penalties under this section should be imposed heavily to serve as a reliable deterrent. “
It further stated that the terms of the endorsement contract and the nature and extent of fraud in the scheme can also be taken as relevant consideration while deciding the exact amount of penalty to be applied. “The committee suggests that the celebrity concerned may also be asked to come forward and publish an explanation / apology to support any fraudulent scheme that deceives people.”
It has recommended amendments to the Act or Rules to include provision to provide expertise, experience and domain knowledge to deal with financial offenses / offenses, so as to be eligible for appointment as competent authority.
“The Ministry should give clear guidelines on what is a misleading scheme and there should be no ambiguity on it. It will enable people to tell whether a scheme is illegal or genuine, ”it said.
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