Beyond SEBI

This is with reference to your editorial, “Beyond SEBI” (September 1). In the US, which has a highly powerful Securities Exchange Commission, Bernard Madoff’s Ponzi ballooned to $50 billion before it was stopped. The scheme was masked under stock trading and clouded in secrecy. The investors were cleverly fed on the genius of Madoff who knew exactly when the market was going up, to invest heavily, and encash as the market was going to fall.

It took a whistleblower to reveal the scam. The fact that the SEC had not woken up to this fairytale for a long time is still being discussed. It is not enough to be empowered with legal weaponry. SEBI would need guile to sniff out potential scams. And for that it has to quickly educate itself in the ways of arch scamsters.

R Narayanan

Ghaziabad

Ponzi schemes are hydra-headed and if the financial regulator cracks the whip on one, another will shoot up. It’s a sad fact that underprivileged people from straitened financial backgrounds fall prey to this. Without doubt we can say that perpetrators exploit the financial illiteracy of the poor. With the Modi government coming forward with the Pradhan Mantri Jan Dhan Yojana, which has already received massive support, the time is now ripe for SEBI to enlighten the masses with the basics of financial literacy by collaborating with this programme. The promoters of PMJDY also should not stop at merely opening bank accounts; they should encourage people to take full advantage of the banking system. This will help reduce instances of physical cash transactions and save people from the clutches of Ponzi schemes.

Kiran Jose

Pala, Kerala

Your editorial lucidly brought forth the alarming issues related to Ponzi schemes. Prevention is better than cure; hence devising practical means of inculcating the knowledge of financial systems in the country is called for, given that so many gullible people frequently fall victim to fly-by-night firms and well-established companies.

The right way to tackle any problem is to to nip it in the bud. Financial awareness must be fundamentally imbibed from bottom-up, not top-down. It is quite unfortunate that PACL has come out with the thorny issue of heterogeneous financial instruments even before the ghosts of Sahara and Saradha have been exorcised. Making financial knowledge part of the education system is a good idea.

B Rajasekaran

Bangalore

At primary school level, different subjects such as basic science, mathematics, history, geography and languages are taught. Though commerce as a subject has been taught at high school level, nowhere is personal finance or financial planning taught. As rightly suggested by you, basic financial literacy should be ideally integrated in the school and college curriculum. 

S Kalyanasundaram

Email

Say no

Justice Sadasivam should not accept the post of governor. A former Chief Justice of India becoming the governor of a State is improper and below his dignity. In the unfortunate event of the deaths of the President and the Vice-President or due to their absence for whatever reason, the CJI functions as acting President. For instance, M Hidayatullah, former CJI, was acting President for a while. The governor is administered the oath of office by the Chief Justice of the State High Court; besides, the governor’s post is at the mercy of the Central Government.

S Raghunatha Prabhu

Alappuzha

The hike loop

According to news reports, the Government may hike dearness allowance from 100 per cent to 107 per cent. Once it makes the announcement, State governments and some employers in the private sector will follow suit.  Soon there will be a situation of too much money chasing too few goods, leading to an inflationary spiral. There will have to be an increase in DA again. The cycle goes on.  Every employee in the country, whether in the private or public sector, must work hard to enhance real income, which is sine qua non for the growth of the country.  

S Ramakrishnasayee

Ranipet, Tamil Nadu

Hold your peace

The current impasse in Pakistan has taken a turn for the worse with the embattled Pakistan Prime Minister Nawaz Sharif caught between the devil and the deep blue sea. The situation has threatened to run out of control with cricketer-turned-politician Imran Khan taking a vow to pull the rug from under Sharif’s feet with the support of the clerics. To make matters worse, the anti-government demonstrators have taken to the streets and indulged in needless violence. It is paramount that all the stakeholders get together in a spirit of reconciliation so that peace returns to Pakistan quickly. New Delhi would also do well to monitor the situation closely and ensure that the impasse in Pakistan has no adverse effect on the Indian side.

NJ Ravi Chander

Bangalore

Having allowed the ultras to entrench themselves deeply, the country and its populace is suffering. It is time rulers read the writing on the wall and put the derailed administration back on track before it reaches a point of no return, by waging a full-scale war against terrorists and demolishing their hideouts with the military power at their command.

HP Murali

Bangalore

Act now

The coal, oil and natural gas sectors are facing the heat of the Government and the judiciary. It is to be appreciated that the Indian judicial system is on an all-time alert and delivers justice proactively. The Supreme Court had cancelled the licenses issued to coal developers from 1993 to 2010. This may be a valid judgment from the view point of the legal sphere. This will destroy the coal industry which in turn will kill power generation. Similarly ONGC and other PSUs are in trouble now. The warning from the Government to ONGC not to excessively drill is timely. Instead of acting retrospectively, the Government and judiciary act in advance. The bureaucracy needs to be monitored from top to bottom. Then, India’s industrial output will grow automatically.

A Prabaharan

Tiruchirappalli

COMMENT NOW