RBI Governor Raghuram Rajan today asked all regulators to be more vigilant in the wake of fraudulent money-pooling schemes and said there was a need to expand the reach of country's banking system.
"Chit funds and other such schemes are clearly a concern and all regulators should be more vigilant," Rajan told reporters after the apex bank's central board meeting here.
"They take advantage of the regulatory arbitrage," he added.
Massive public outrage was witnessed in the wake of recent chit funds scam perpetrated by Kolkata-based Saradha group that defrauded thousands of investors of their hard earned money.
The governor said RBI is trying to gather market intelligence and then inform the concerned authorities for taking appropriate action. "The state governments also need to pay attention," he said.