Second Warning

CEAT Kelani Holdings Managing Director Ravi Dadlani (right) and Lanka Ashok Leyland CEO Umesh Gautham exchange the OEM agreement

Continuing its campaign against pyramid schemes, Central Bank is again warning the public that persons who buy a product, not for its own sake but expecting future returns from getting more enter the scheme, are not engaging in a simple trade transaction but a different type of game.

“As the expectation of future returns is based purely on the expected expansion in the number of participants, the operation acquires the characteristics of a pyramid scheme, giving rise to the risks explained in the Central Banks recent press notices,” the Central Bank said.rn

rn”The collapse of a large pyramid scheme could affect the economy of a country in general, and its financial sector in particular if the scheme is financed by participants using money borrowed from financial institutions.”rn

rnThe full text of the release appears below:rn

rnNOTICE TO THE PUBLIC ON PYRAMID SCHEMESrn

rnThe Central Bank wishes to invite the attention of the public to its press notices published recently in newspapers

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