An Empirical Study on Awareness of Ponzi Schemes in India

An Empirical Study on Awareness of Ponzi Schemes in India

Jagruti Patni, Naveen Kumar Singh
Copyright: © 2024 |Pages: 18
DOI: 10.4018/979-8-3693-3633-5.ch003
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Abstract

The given point of view on how Indians perceive and relate to Ponzi is taken up for consideration. The rather classic sampling model employed in the study is alarming as it shows that despite the information imbalance between the urban and village areas, there are huge knowledge gaps left in the villages. The survey showcases a scary picture—Indian people are highly attracted to this preposterous rhetoric and speculative investments that underutilize financial rationality. The research points out that celebrity endorsement is a major issue requiring immediate legal action. Scapegoating public figures who had the audacity to lend their dignity to Ponzi schemes means that the public is more trusting of the unknown, the never-heard-of-before enterprises. A highly valuable conclusory statement was developed, which formed the basis for the development of a blueprint for improving public education and financial literacy initiatives. Using this, Indians are allowed to avoid that narrow bridge, which often leads to the drainage of their savings through the wrong investment schemes.
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Literature Review

According to the study of economic journalist Dr. Bindra(2020), “A staggering 2 lakh credulous investors were defrauded” clearly demonstrates the sheer number of issues and sufferings brought about by financial scams involving Ponzi schemes, unregulated deposit programs, and collective investment schemes (CIS). Over the years, India has experienced a number of fraudulent schemes that have negatively impacted the country's financial and economic stability. This essay looks at the factors that led to the increase in popularity of investment schemes like Ponzi and CIS, how these schemes have operated throughout time, and potential protections for investors' interests. Cerasoli, S., & Porporato, A. (2023) concede that many desire to become affluent with the least amount of work. Both the con artists and the purported victims of these get-rich schemes exhibit questionable morality. Ponzi schemes illustrate the ethical disparities between business and government while also offering insights into individual scams.

A large body of research studies has been carried out over the years to gain insight into the Ponzi Schemes' awareness in India. Studies shows that more than 70% of Indian investors were watchful of Ponzi schemes but still succumbed to it, which was due to the prospect of unrealistic gains (Assocham, 2021). This thereby brings to light to the fact that the governing bodies need to introduce more comprehensive investor education and protection policies.

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