The Courts are in the process of indicting companies indentified as being involved in pyramid schemes and due action will follow, Central Bank Governor Dr. Nandalal Weerasinghe said fielding a question on the present status of these investigations.
“The Central Bank cannot elaborate on matters that are before Court but has done its part in keeping with its mandate to ensure financial system stability,” the Governor said.
The Central Bank conducted investigations and determined 21 companies that have engaged in a scheme prohibited under Section 83 (C) of the Banking Act, No. 30 of 1988 as amended.
The Bank stated that it has taken measures to address the alarming increase in prohibited schemes which poses risks to the financial system stability and protection of the public from such schemes.
These initiatives include conducting investigations under Section 83C(3) of the Banking Act to determine whether individuals or entities have contravened or are likely to contravene the provisions of Section 83C(1) of the Banking Act. Any person found guilty of being party to pyramid-type prohibited scheme will be subject to imprisonment for a term not exceeding three years, or a fine not exceeding Rs1,000,000, or both.
Punishments are stipulated in the provisions of Section 83(C) of the Banking Act.
