Leave a comment


RGESS Sees Mis-Selling, Illegal Cash Paybacks

Rajiv Gandhi Equity Savings Scheme (RGESS), the government’s pet project to bring retail investors into the stock market, is just a few months old, yet some unscrupulous mutual fund (MF) distributors, with the help of select fund houses, have started offering cash payback as high as Rs 7,000 per Rs 1 lakh of investment in this scheme. The practice of payback, which is illegal, is proliferating because some fund houses are finding it tough to raise money for RGESS plans as the financial year ends in two weeks and there are not enough small investors willing to invest in these schemes. 
According to Sebi rules, if an MF scheme can’t garner Rs 10 crore, it should be wound down and all the money be returned to initial investors. Desperate, fund houses are paying distributors as much as 7.5% of what customers invest in RGESS plans, of which up to…

View original post 23 more words


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: