No dealings with Mineral Pay, BOZ tells public
Written by Millennium on January 19, 2019
BUUMBA CHIMBULU writes
THE Bank of Zambia (BOZ) has advised the public against dealing with Mineral Pay because it is operating illegally.
BOZ Head of Communications Mr. Kanguya Mayondi disclosed to The Sun in Lusaka yesterday that the central bank is investigating the financial service provider for operating without a licence which is in direct contravention of Section 6 (2) of the banking and Financial Services Act No.7 of 2017
Mr. Mayondi also said that BOZ, in conjunction with the Drug Enforcement Commission (DEC) and the Financial Intelligence Centre (FIC), is also investigating the company in accordance with the banking and Financial Services Act and the prohibition and prevention of Money Laundering Act respectively.
He said “the Central Bank had conducted a review of Mineral Pay’s business model and discovered that the company was engaging in a ‘money circulation scheme’, which was prohibited.” He stated of Mineral Pay which has been offering a financial service by collecting deposits from members of the public.
He has also warned the public to be cautious when dealing with any investment that promises huge returns in a very short period without any underlying economic activity.
“…the public is urged to only deal with financial service providers licenced by the BoZ, the Securities and Exchange Commission of the Pensions and Insurance Authority,” he said.
Mr Mayondi explained that a money circulation scheme was an unsustainable investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organisation running the operation.
He further explained that the scheme in question enticed new investors by offering much higher returns than their legitimate investments, in the form of short-term returns, which either abnormally high or unusually inconsistent with the norm.
“The schemes are of various forms but all promise high returns to individual who are recruited by depositing money into an account after which they are issued with a purported investment document,” he said.