Union Minister Nirmala Sitharaman on Sunday said the finance ministry is working with MeitY and RBI to clamp down on ponzi apps to prevent them from taking away hard earned money of gullible investors.

Cautioning investors against ponzi apps, Sitharaman said investors should do their due diligence and should not be lured by claims of lucrative returns made by them.

“There are also apps which are coming out and reaching out to people saying we can do this, we can do that. Your money will fetch you this much.

“Many of them are ponzi, the apps on which we are working with the Ministry concerned, the Ministry of Electronics & Information Technology (MeitY) and with the Reserve Bank and clamping down on them like never before, so that we don’t get those ponzi apps, taking away hard earned money,” she said.

Speaking at the Thinkers Forum at Tumakuru (Karnataka), she said, social influencers and financial influencers are all out there but a strong sense of caution is required in each one of us to make sure we do double checking, counter checking, don’t go as a flock into something and therefore protect hard-earned money.

Asked about regulating social influencers and financial influencers, she said, “I’m not having any proposal before me for regulating them at this stage.”

Asserting that investors should be cautious of influencers, she said if there are three or four people giving us very objective good advice, there may be seven others out of 10 who are probably driven by some other considerations.

In 2019, the government enacted a law called the Banning of Unregulated Deposit Schemes Act, 2019, which looks to prevent unregulated entities from collecting deposits and duping the poor and gullible of their hard earned savings.

As per the Act, any deposit taker who solicits deposit in contravention of Section 3, shall be punishable with imprisonment of not less than one year and up to five years.

As per the law, the first claim on the recovered money will be of depositors and the proposed legislation also has some exclusion including money collected by real estate firms and from friends and relatives.

It seeks to help tackle the menace of illicit deposit-taking activities in the country, which at present are exploiting regulatory gaps and lack of strict administrative measures to dupe poor and gullible people of their hard-earned money, according to the government.

Crypto check

Underlining that global consensus is necessary for the regulation of crypto currencies, before India makes any move on it, Sitharaman said a global template may have to be created, and everyone will have to work together on it, otherwise regulating it will not be effective.

The minister, however, said it does not mean controlling of ‘’distributed ledger technology’’, which has its goodness and potential.

“The underlying principle is, because the digital currencies are completely digitalised and technology-driven, the technology which is very distributed, and some times identity is very difficult to be established, but which has potential, it will therefore have to be acted upon only with all countries coming on board,” Sitharaman said.