Home
Finance Resources
Investment Planning
Banking
Finance
Stock Market
Futures & Options
Trading
Mutual Funds
Insurance
Taxation
Enquire
Home » Finance News » RBI cracks down on MLM firms, ponzi schemes

RBI cracks down on MLM firms, ponzi schemes

Coming down heavily on shady operations of fraudulent multi-level marketing companies, Reserve Bank of India [ Get Quote ] has alerted banks to be careful while opening accounts of the marketing/trading agencies.

Many such firms pose as MLM agencies for consumer goods and services and manage to mobilise large amount of deposits from the unsuspecting public with promises of ridiculously high returns.

With MLM companies, operating ponzi schemes mushrooming all over the country, RBI has urged banks to be extremely careful before issuing large number of cheque books to these firms.

Also cautioning the general public from falling prey to such schemes, RBI has named seven MLM companies:

  • Fine India Sales Pvt Ltd,
  • Lakshya Levels Marketing,
  • Eve Industries,
  • Trident Advertising and Trade Links Pvt Ltd,
  • Super Life Link Distributors,
  • Lue Brain Education Society, and
  • Manya Mantra Marketing.

"These firms and their agents had reportedly promised very high returns on deposits and lured common people to part with funds in the name of certain investment/deposit schemes," the RBI said in a circular.

How these MLM companies function:

The representatives of the above firms open accounts at various bank branches at different locations and make numerous small cash deposits in those accounts.

These funds, running into crores of rupees, after being pooled at the Principal Accounts of the MLM firms, were eventually allowed to flow out for purposes apparently illegal or highly risky.

These firms get large number of cheque books issued from the banks, where they have their accounts and issue post dated cheques, of small amounts representing future interest dues and deposit payments, to the investors.

Interesting, investors deposited their money in the accounts of MLMs at places far away from where the accounts were actually opened. This was facilitated by Core Banking Solution offered by the banks.

Since the operations of the firms involve unusually high returns, ongoing repayments of interest and deposit amounts depend on continuous and uninterrupted flow of fresh deposits.

Therefore, at some stage, the flow of deposits get stifled and post dated cheques start bouncing.



More Finance News
Previous 1 2 3 4 5 6 7 8 9 10 11 Next


put comment
Domain Registration | Windows Hosting | Linux Hosting | Java Hosting | Virtual Dedicated Server | Dedicated Server | Reseller Web Hosting | Unlimited Windows reseller hosting | Unlimited Linux reseller hosting | Cheap Windows reseller hosting | Cheap Linux reseller hosting | Cheap Windows hosting | Best Windows hosting | Windows hosting Multiple Domains | Unlimited Windows hosting | Compare hosting plans | Cheap Linux hosting | Best Linux hosting | Linux hosting Multiple Domains | Unlimited Linux hosting | Cheap asp.net hosting | Best asp.net hosting | unlimited asp.net hosting | Cheap asp.net reseller hosting | Unlimited asp.net reseller hosting | Java Features | Cheap Java hosting | Best Java hosting | unlimited Java Hosting | Unlimited Linux reseller hosting | Java Hosting Multiple Domains| | Matargashti Full Song | Matargashti mp3 Download | Matargashti Video Download | Matargashti Song Tamasha | Prem Ratan Dhan Payo Songs Download | Prem Ratan Dhan Payo Songs mp3 Download | Prem Ratan Dhan Payo Songs Video Download | Pinga Song Download | Pinga Full Song mp3 Download | Pinga Song mp3 Download | Pinga Song Video Download | Latest Bollywood Updates | Bollywood Updates | Prem Ratan Dhan Paayo Songs Download|
© ProfitGuruOnline-2024. All Rights Reserved.