Central Bank says there is an increasing trend in the promotion of illegal pyramid schemes in the country.
The Bank has already filed 13 court cases against persons who was promoting illegal pyramid schemes going against the Banking Act.
The 13 cases are filed against persons from across the country who was mustering clients to these schemes which is a non sustainable model thus leading into many participants losing their money.
The Banking Supervision unit of the Central Bank said apart from these 13 cases investigations are being conducted to find out more offenders.
An officer who did not wanted to be quoted said “We hope the number of court cases will go up further”
He added “Right now there is an increasing trend in this kind of unauthorized schemes”
A pyramid scheme is a non-sustainable business model that involves promising participants payment primarily for enrolling other people into the scheme, rather than from any real investment or sale of products or services to the public.
Pyramid schemes are a form of fraud
The Bank says the Police and the CID have been informed of this scheme and they are now in the lookout for people who promote the concept.
The Central Bank on Sunday warned the public via national news papers, not to get involved in participating in prohibited schemes with pyramid structures
It said if caught, the participants will be imprisoned for 3 years or will be meted out a fine not exceeding Rs. 1 million or both an imprisonment and a fine will be imposed.
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