Public alerted on unregulated financial schemes
Source: Chronicle News Service
Imphal, November 02 2023:
The Finance Department has raised alarm over increasing instances of unregulated financial schemes, particularly those involving cash transactions that are being propagated by unscrupulous groups of money lenders and other individuals within various sections of the society.
According to the Finance Department, the notification serves as a vital cautionary measure to protect individuals, small businesses, and small and marginal farmers from falling victim to these predatory practices.
It stated that reports have surfaced detailing exploitation faced by countless individuals and small-scale enterprises, primarily due to the allure of obtaining loans quickly and with minimal hassle.
These unregulated financial schemes have ensnared many, promising easy access to capital.
However, they have led to severe consequences, such as excessive interest rates and hidden charges imposed on borrowers.
Tragically, many small and marginal farmers have been forced to part with their land or property as collateral due to the unjust and insecure nature of these financial schemes.
The finance department has outlined several critical points for the general public to exercise caution when approached by any person or entity offering loans in a seemingly effortless manner.
Such loans often come with exorbitant interest rates and concealed charges.
Furthermore, one should be sceptical of offers that provide loans at interest rates significantly lower than those offered by commercial banks, as these entities may disappear after collecting processing fees, the notification said, while advising the public to remain vigilant when confronted with companies, entities, or individuals promising extraordinarily high returns on investments.
It further cautioned the public against participating in illegal financial schemes such as money chain or pyramid structures and Ponzi schemes, which often involve an initial deposit or the purchase of a product as a condition for enrolment.
These activities are not only illegal but are also banned, maintained the notification.
In cases where fictitious offers are received through email, SMS, or calls promising financial gains, individuals are encouraged to promptly inform the office of the SP of the Criminal Investigation Department (CID), SP of Cyber Crime, or any other law enforcement agency, said the notification.