<h1>RBI Urges Strict KYC/AML Compliance to Combat Ponzi Schemes; States Empowered Under 1978 Act to Act on MLM Scams.</h1> The Prize Chits and Money Circulation Scheme (Banning) Act, 1978 empowers state governments in India to act against Ponzi schemes. The Reserve Bank of India (RBI) forwards complaints of fraudulent schemes promising high returns to appropriate government agencies. RBI has instructed banks to adhere strictly to Know Your Customer (KYC) and Anti Money Laundering (AML) guidelines and to review accounts of marketing agencies and investment firms. The public is advised to report fraudulent offers to local authorities. RBI emphasizes that Multi-Level Marketing (MLM) schemes fall under the 1978 Act, urging state governments to take necessary action.