The Union Minister of State in the Ministry of Finance & Company Affairs, Mr Ananda Rao V. Adsul in a written reply to the unstarred question No. 4889 asked by the Members of Parliament Messrs Ravindra Kumar Pandey, Dr S Venugopal, Dr M V V S Murthi and Mr Ram Mohan Gadde, said:
"Reserve Bank of India (RBI) has reported that it had examined the scheme of M/s Amway India Enterprises (AMWAY) in March 2001 and again in May 2002 aiming at creating a chain of distributors and taken a view that the said scheme appears to be a prize chit or money circulation scheme as defined in and prohibited under the Prize Chits and Money Circulation Schemes (Banning) act, 1978. The offences under the said Act are cognizable and the police authorities of the concerned State Governments have to investigate and take a view whether the scheme of Amway India attract the prohibition under the said Act.
Amway had made representation to the Minister (Economic), Embassy of India in Washington DC that its schemes are not covered under the Act. RBI had once again examined the matter and it had advised to the Embassy that the Amway's activities appear to attract the provisions of the Prize Chits and Money Circulation Schemes (Banning) act, 1978. RBI has forwarded a report in this regard to the police authorities who are empowered under the Act for taking necessary action. "
The notable point here is that the Union Minister of State stated the above statement on the Floor of Parliament on December 20, 2002, and the respective State governments have yet to act on the orders of the Reserve Bank of India and the Union Ministry of Finance.
This is the state of affairs in India.