National police spokesperson Assistant Commissioner Paul Nyathi has said the police in conjunction with the Reserve Bank of Zimbabwe are conducting an operation to apprehend institutions behind pyramid and ponzi schemes in violation of the country’s banking regulations.
He spoke after last week’s raid of KWD Digital Marketing in Harare with the central bank’s Financial Intelligence Unit confirming the firm had no banking licence as required by law. Nyathi said:
In consultation with the RBZ, we are also looking into statuses of other schemes dotted around the country…
They approach a number of people claiming to be registered with the RBZ, taking money in the process.
Last week, the central bank warned people against pyramid and Ponzi schemes that come in various forms and guises, luring people to invest their hard-earned money, promising unrealistic and unsustainable investment returns. Read the central bank’s statement in part:
These are fraudulent investment schemes under which existing investors are paid returns, not from genuine market investment of their funds, but from contributions made by new investors, until a point when the scheme can no longer attract new investors and collapses.
The RBZ said all institutions offering financial services must be issued with licences before operations commence adding that entities involved in ponzi schemes were carrying out banking activities in breach of the Banking Act (Chapter 24:20) and Section 5 of the Banking Act.
More: The Herald