<h1>RBI Alerts Public on Illegal MLM Schemes Promising High Returns, Citing Prize Chit and Money Circulation Act, 1978.</h1> The Reserve Bank of India (RBI) has warned investors about multi-level marketing (MLM) firms that promise high returns through member subscription fees. These schemes rely on enrolling new members rather than actual product sales, and collapse if new member recruitment stops, harming those lower in the pyramid. The public is advised to avoid such offers and report them to the police, as they are illegal under the Prize Chit and Money Circulation (Banning) Act, 1978. The government has issued guidelines for states to regulate direct selling and MLM activities to prevent fraud and protect consumers.