India’s Central Bank Issues MLM Caution

It didn’t take long for MLM to get some bad press in 2015. The Reserve Bank of India, the nation’s central bank, cautioned the public “against Multi Level Marketing Activities” on the first day of the new year.

RBI issued the statement less than a month after police in Bangalore arrested four individuals associated with a “program” known as YOBSN (Your Own Branded Social Network). In November, the U.S. Securities and Exchange Commission alleged an India-based “program” known as “Profits Paradise” was a fraud.

Some Ponzi analysts are questioning whether an emerging cycler scheme known as Unison Wealth may be Indian in origin. Unison Wealth is lauded by promoters of the Achieve Community scheme. (See K. Chang comment at PP Blog and thread below this Dec. 9 Unison Wealth Story at

At least one previous MLM scheme — Club Asteria — traded on the venerated name of Mahatma Gandhi. A recent scheme known as 8Elos that may have ties to TelexFree Ponzi-scheme hucksters has traded on the venerated name of Abraham Lincoln.

Here is RBI’s full statement (italics added):

The Reserve Bank of India has cautioned the public against Multi-level Marketing (MLM) activities so that investors do not fall prey to unscrupulous entities.

Explaining the functioning of these entities, the Reserve Bank stated that MLM/Chain Marketing/Pyramid Structure schemes promise easy or quick money upon enrolment of members. Income under such schemes majorly comes from enrolling more and more members from whom hefty subscription fees are taken rather than from the sale of products they offer. It is incumbent upon all members to enroll more members, as a portion of the subscription amounts so collected is distributed among the members at the top of the pyramid. Any break in the chain leads to the collapse of the pyramid, and the members lower down in the pyramid are the ones that are affected the most.

The Reserve Bank has advised that members of public should not to be tempted by promises of high returns offered by entities running Multi-level Marketing/Chain Marketing/Pyramid Structure Schemes. The Reserve Bank has reiterated that falling prey to such offers can result in direct financial losses and they, in their own interest, should refrain from responding to such offers in any manner.

The Reserve Bank has also said that acceptance of money under Money Circulation/Multi-level Marketing/Pyramid structures is a cognizable offence under the Prize Chit and Money Circulation (Banning) Act 1978. Members of public coming across such offers should immediately lodge a complaint with the State Police.

Alpana Killawala
Principal Chief General Manager

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