THE Bank of Namibia has warned members of the public against taking part in illegal deposit taking schemes in the county.
In a statement released last week, deputy director: corporate communications Kazembire Zemburuka emphasised that taking deposits from the public without authorisation from the central bank is prohibited in terms of section 5 of the Banking Institutions Act, No 2 of 1998.
"In line with the mandate of the bank to investigate financial schemes, which are operated in contravention of the act, the bank has become aware of investment schemes, which are increasingly becoming popular in Namibia on social media and other online platforms," Zemburuka said.
He added that as a result, the bank and the police are investigating a number of suspected illegal financial schemes, and once the investigations are completed, the public would be informed of the outcome.
Outlining the different features exhibited in illegal investment schemes, Zemburuka said "the business would usually not be authorised by BoN to accept deposits from the public or conduct banking business; and the business involves an investment scheme whereby members are promised high returns within a very short period of time.
He added that "the promoter of the scheme accepts deposits/investments from members of the public as a regular feature of its business, and further extends these funds to other members; the rapid growth of membership is achieved through promotional messages via social media platforms, most commonly WhatsApp groups; and the business does not sell any products, but the principal feature of the business is a financial scheme, which involves enticing members of the public to invest and enjoy high returns".
He advised members of the public not to participate in such schemes as they are not only illegal, but are also financially risky.
Zemburuka said: "The bank is empowered to take action against members of the public who participate in illegal financial schemes. The bank reminds members of the public who operate and/or promote such businesses that they commit an offence, and if found guilty, will be punished in terms of section 72 of the act."