The RBI web site will help people file and track complaints against those trying to cheat through fraudulent schemes with the help of a coordinated effort involving Sebi and other regulators and also the states.
Launching ‘Sachet’ last week, the web site for helping people avoid getting trapped in the illegal deposit schemes, the Reserve Bank of India (RBI) Governor Raghuram Rajan said: “Initiating quick follow up and taking cases to a logical conclusion by punishing the guilty is paramount to deter entities in future from carrying out unlawful activity. I hope ‘Sachet’ would help regulators in doing this as much as it would help members of public in depositing their hard earned money with genuine entities by giving them timely information about these entities.”
This is extremely important as it took more than three years starting April 2010 for the Securities and Exchange Board of India (Sebi) to get into the crackdown mode in West Bengal’s Rs 2,000 crore Saradha scam where investors were duped by promises of high returns on their deposits in the name of providing land/flats.
Saradha Realty kept the market regulator hanging by providing cartons of meaningless records and even saying that its records were located in the servers in Boston, which could be obtained only through specific codes available with its staffers.
Things have no doubt improved since then, especially after Sebi getting more powers to crack down on Ponzi schemes through amendments in the Securities Laws Act passed in August 2014 allowing it to conduct searches and seek information.
But, an easily accessible window for the investors to verify the investment schemes or report any fraud quickly has been still missing.
The RBI launching ‘Sachet’ (https://www.sachet.rbi.org.in), which will provide information about the entities that can accept deposits, lodge complaints and also upload information and evidence regarding illegal acceptance of deposits, or any default in the repayments, is a move that can easily fill this gap.
What would work to the advantage of ‘Sachet’ is its close coordination among the regulators because of its backing of the state level coordination committees SLCCs, which have RBI, Sebi, NHB, Irda, ROC and concerned state departments as their members.
A depositor interested in a scheme announced by a company can go to the website and check whether the entity is registered with any regulator or is allowed to accept deposits or not, before making any investment.
Those who have already invested, but find that they were being duped, can file a complaint and track that. Though the website in itself neither promises a time-bound resolution nor it assures that the complaints will be addressed for sure, it does appear to become a serious platform for interaction between the depositors and the concerned regulators.
It will forward the complaint to the concerned regulator immediately and provide the contact details of the officials handling it, putting pressure on it to act fast; like in Saradha type cases, it will be difficult for Sebi to wait for years to take action. If there is no response within 30 days, Sachet has the facility for sending reminders also.
While it is true that Sachet is no guarantee that Saradhas will not happen again as, in most of the fraud cases, it is the depositors’ greed that plays an important role in ignoring the risks involved — it would certainly save those from falling into any trap who would be willing to check before taking a plunge, besides acting as a deterrent against the running of unscrupulous schemes.