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बेसिक इंग्लिश का दूसरा सत्र (कक्षा प्रारंभ : 22 अक्तूबर, शाम 3:30 से 5:30)
Q. Collective regulator in financial sector: Discuss the importance of collective regulators in regulating collective investment schemes.
Nov 25, 2016 Related to : GS Paper-3

Ans :

Earlier this year financial sector regulators the RBI, SEBI, IRDAI and PFRDA have launched web portal to coordinate their efforts in the battle against collective investment schemes.

Need of collective regulators-
  • In recent time, various fraud collective investment schemes have ruined prospects of Investors. Such schemes threatened the stability of the financial system and have proved hard to put down in the past.
  • Such schemes generally operate below the radar through word of mouth and manage to stay out of the regulator’s sight. Such scheme comes in various forms such as jewellery savings schemes, chit funds, pyramid schemes and even plantation schemes.
  • It is therefore not easy for conventional regulatory methods and systems to spot such schemes before they cause damage.
Importance of collective regulations through web portal-
  • The objective of a website is to call out those offering dubious investment propositions are an excellent example of how technology and the internet can be leveraged to eliminate blind spots in regulation.
  • The website will enable regulators to receive on-the-ground information direct from investors who are affected.Investors can report on the website their complaints for non-receipt of interest/dividend or capital and even flag off schemes that they see as suspicious.
  • The advantage is that regulators can access information real time and act before damage is caused. For their part, the regulators can use the portal to disseminate information on entities and schemes that they may ban from time to time.
The collective web portal among various financial regulators against fraud collective investment schemes is very important step. By getting information through the portal, all regulators will coordinate among themselves and keep eye on illegal deposit schemes is good. To great extent it will helps in containing such fraudulent schemes.   


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