Your Financial Fix | The Risks of Unregulated Investment Schemes – Kashmir Observer
By Irshad Mushtaq
Do you know why people fall into the traps of risky investment schemes? One of the primary reasons is the absence of a legal framework in India that permits exorbitant returns over a short period of time. While banks offer interest rates ranging from 7% to 8%, the difference is minimal and they are regulated by the Reserve Bank of India. On the other hand, the stock market and insurance are regulated by the Securities and Exchange Board of India and the Insurance Regulatory and Development Authority, respectively. These regulatory bodies ensure that all financial transactions are conducted within legal boundaries, providing a sense of security to investors.
However, in the absence of regulation, individuals often fall prey to fraudulent investment schemes promising high returns. Without the oversight of these regulatory bodies, there is no guarantee of the legitimacy of such ventures. It is crucial for investors to ensure that their money is being managed within the purview of these regulatory guidelines. Without this assurance, they are at risk of losing their hard-earned money.
Ultimately, it is up to individuals to educate themselves about the legitimacy of investment opportunities before diving in. They must be wary of offers that seem too good to be true and always seek out investments that are regulated by the appropriate authorities. Failure to do so can lead to financial ruin and place the blame solely on the investor for not performing due diligence. It is imperative to understand the importance of investing within the bounds of regulatory oversight to safeguard one’s financial future.
- Author is NISM qualified, Mutual Fund advisor and distributor having experience of 18 years in financial market
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