Continuous action against pyramid schemes
COLOMBO: The Central Bank has strengthened its action against
pyramid schemes, the Bank said yesterday. Some of the recent measures
initiated by the Central Bank are:
The conduct of investigations into pyramid schemes and other
unauthorized finance businesses such as unauthorized deposit-taking
businesses are handled by the relevant Departments in the Central Bank.
These activities require legal backing and regulatory provisions
under different statutes such as exchange control, payments and
settlements, anti-money laundering and supervision of banks and non-bank
financial institutions and expertise, and the relevant Departments have
the necessary resources and skilled staff to handle investigations very
They have also done so for many years. Presently, these
investigations and court cases that had been filed in connection with
pyramid schemes are being handled by the relevant Departments with the
active assistance of the Police and the Attorney General’s Department.
The Central Bank has also obtained the services of a Senior Police
Officer who has been assigned for these tasks by the Inspector General
of Police to coordinate investigations with relevant police stations.
This new effort will further strengthen action against pyramid
As part of the recent operations, the Police raided a pyramid
promotion meeting in Polpitigama area and suspects were taken into
custody. The case is now proceeding.
The Central Bank believes that public awareness is also vital to
effectively combatting pyramid schemes and other unauthorized finance
Accordingly, an intense programme of public awareness on risks in
engaging in pyramid-type transactions has been well-disseminated and it
has been made a part of the Central Bank’s public awareness programme on
the financial system.
A newly introduced press advertisement in Sinhala, Tamil and English
languages is being published regularly to educate the public of
fraudulent methods of pyramid schemes and risks involved in
participation in such schemes.
The Central Bank warns the public to be aware of the dangers of
getting involved in illegal and fraudulent pyramid and multi-level
marketing schemes and requests co-operation of the public to inform the
Central Bank of any such schemes operating in different parts of the