An Analysis of the Financial Schemes to Defraud People in the Garb of Sound Investment

31 Pages Posted: 15 Jun 2013

See all articles by Sujoy Dhar

Sujoy Dhar

ICFAI Business School (IBS)

Date Written: June 15, 2013


Different conventional financial schemes are prevalent in the market such as bank deposits, post office schemes. Life Insurance products, Public Provident Fund, Government and Corporate Bond, equity share, mutual fund schemes, real estate, gold, bullion, derivative products, paintings and antiques which offers a certain rate of return depending on the riskiness of the scheme. Apart from these traditional players, , there are Nidhi companies, Chit fund players, Non Banking Financial Companies as well as Financial intermediaries which are alluring the layman retail investors by making a promise of offer a super normal rate of return. Due to the lack of adequate financial literacy and the greed of appropriating above average return, a major section of the retail investors are being trapped by those unscrupulous lenders. As a result, they have to lose their hard earned money and this creates a keen jerking effect to the all stakeholders of the nation. The RBI and SEBI has already conducted different financial awareness program to protect the depositors as well as investors from these ponzi schemes. The objectives of the research paper is to focus on the major threats imposed by the shadow bankers, to analyze the unholy nexus of the media business and chit fund players, to interpret the interdependence between the banks, micro finance institutions, chit fund payers. The methodology of the paper is collecting the secondary data from the different research articles of various national and international reputed journals which are available in Ebscho and Emerald. Simultaneously analysis and collection of secondary data is performed from the Annual Reports of Reserve Bank of India, Security Exchange Board of India, website of the Ministry of Finance, Government of India etc. This paper will give a new dimension in the literature of investment strategies of the Individual Investors

Suggested Citation

Dhar, Sujoy, An Analysis of the Financial Schemes to Defraud People in the Garb of Sound Investment (June 15, 2013). Available at SSRN: or

Sujoy Dhar (Contact Author)

ICFAI Business School (IBS) ( email )


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