SBI says Jago Grahak Jago-like campaign needed to prevent duping of investors by shadow banking system.
In the backdrop of the Saradha chit fund scam, the State Bank of India on Saturday said the Reserve Bank of India or Securities and Exchange Board of India should take up major campaigns to create awareness among investors being lured by ponzi schemes.
“RBI...or SEBI should begin a major campaign in line with Jago Grahak Jago to create awareness among the investors about these ponzi schemes,” SBI chairman Pratip Chaudhuri said here on the sidelines of a banking summit.
Recently, the West Bengal based Saradha Group has been accused of duping investors of their savings running into thousands of crores of rupees. On shadow banking system, he said it seemed to have more flexibility than in the traditional banking set-up.
For banks, minimum deposit was seven days, while the shadow banking system allowed even one day deposit, he said.
Shadow banking System is generally referred to involvement of financial intermediaries in aiding credit creation without regulatory oversight.
As per a report released on Saturday by Switzerland-based Financial Stability Board, the shadow banking business in India is estimated at over $670 billion (nearly Rs. 37 lakh crore) and accounted for about one per cent of the worldwide total.
Mr. Chaudhuri said banks needed to do more in terms of penetration “when we have less banking footprint with low branch and ATM coverage.”