Regulators need to be more vigilant against ponzi schemes: RBI

Reserve Bank of India (RBI) Governor Raghuram Rajan on Thursday asked all regulators to be more vigilant in the wake of fraudulent money-pooling schemes, citing a need to expand the reach of the country's banking system.

"Chit funds and other such schemes are clearly a concern and all regulators should be more vigilant," the RBI Governor told reporters after the apex bank's central board meeting in Kolkata.

"They take advantage of the regulatory arbitrage," he said.

A massive public outrage was witnessed in the wake of the recent chit funds scam perpetrated by the Kolkata-based Saradha group, which defrauded thousands of investors of their hard-earned money.

The Reserve Bank is trying to gather market intelligence and then inform the concerned authorities for taking appropriate action, Mr Rajan said.

"The state governments also need to pay attention."