New Delhi: The crucial Sebi bill aimed at tackling the ponzi menace was Wednesday approved by Lok Sabha with government saying that Prime Minister Narendra Modi will soon announce a financial scheme which will discourage people from being allured by fraudulent operators.

The Securities Laws (Amendment) Bill, 2014, has been brought in the backdrop of lakhs of small investors being duped by fraudulent investment schemes, like in the alleged Saradha scam.

The new law will empower Sebi investigators to conduct searches and seek information from suspected entities, both within and outside the country. However, as a safeguard, any search operation can be conducted only after approval of a designated court in Mumbai, where Sebi headquarters is based.

Replying to the debate on the Bill, Finance Minister Arun Jaitley said, "Where there is money there are bound to be some sharks...You would have stray cases and it deals with them when strong regulatory mechanism is required."

He said one of the ways to deal with the menace of ponzi scheme is to expand the reach of banking system to save gullible investors from such schemes.

"The Prime Minister in the next few days is likely to announce that scheme (financial inclusion) and once banking expands in this country to almost cover as many people as possible, we intend reaching at least 2 more account holders in 7.5 crore families.

"That is our object of financial inclusion and if we are able to reach such a large section of population, the need for people to be attracted such ponzi schemes itself will go down," he said.

Jaitley further said that banking system, which "works on conventional and conservative wisdom" is still one of the most reliable form of investments and savings.

Fraudulent investment schemes involving money circulation schemes are popularly known as ponzi.

Jaitley said, "One of the essence behind these (ponzi) schemes or arrangements is that they promise a return which is more attractive and, therefore, attract gullible investors by showing them a new green passage that they can walk on."

He said the Securities Laws (Amendment) Bill, 2014, is an attempt to empower Sebi. "Experience tells that those who violate laws may be clever than the law itself and therefore this law to empower its agencies to deal with such people," he said.

Saying that the amendments to the Sebi bill was originally brought in by the UPA government, he said, it would be the government's endeavour that the amendments are implemented soon.

The bill aims to empower capital market watchdog (SEBI) giving powers such as to crackdown on fraudulent investment schemes, seek information from any entity related to a probe authority and to seek call data records.

Under the new bill, the Securities and Exchange Board of India (Sebi) would require permission from a designated court in Mumbai for carrying out search and seizure operations related to investigations.

As per the bill, any unregistered scheme having a corpus of Rs 100 crore or more would be deemed as a collective investment scheme.

An ordinance to empower SEBI to deal with ponzi schemes was promulgated thrice during the previous UPA regime but the same could not be passed by Parliament to make it an Act.

Once the bill becomes an Act, SEBI would have powers to call for information "not only from the people or entities associated with the securities market but also from persons who are not directly associated with the securities market".