The Union Cabinet has approved the Banning of Unregulated Deposit Schemes Bill.The bill aims to tackle the menace of illicit deposit- taking activities in the country.
The bill defines regulated deposits as all deposit-taking schemes which are overseen and regulated by regulators like (a)Reserve Bank of India (RBI) (b)Securities and Exchange Board of India (SEBI) (c)Ministry of Corporate Affairs and (d)state and union territory governments.
On the other hand,deposit-taking scheme is defined as unregulated if it is not registered with the regulators listed in the Bill.
The bill completely bans the promoting,operating,issuing advertisements or accepting deposits in any Unregulated Deposit Scheme.
The Bill also defines “Deposit Taker” and “Deposit”.Deposit Takers include all possible entities including individuals receiving or soliciting deposits except specific entities such as those incorporated by legislation.
Deposit is defined in such as an amount of money received through an advance, a loan, or in any other form with a promise to be returned with or without interest.Such deposit may be returned either in cash or as a service and the time of return may or may not be specified.
The Bill define three types of offences:(a)running of Unregulated Deposit Schemes (b)fraudulent default in Regulated Deposit Schemes and (c)wrongful inducement in relation to Unregulated Deposit Schemes.
The bill also provides for severe punishment and heavy fines to act as a deterrent.It also has a provision for repayment of deposits in cases where such schemes manage to raise deposits illegally.
Further,the bill provides clear cut timelines for attachment of property and reimbursement to depositors.It also provides for designation of Courts to oversee repayment of depositors and to try offenses under the bill.
The bill also provides for the creation of an online central database for collection and sharing of information on deposit-taking activities in the country.