Parliament has passed the Banning of Unregulated Deposit Schemes Bill 2019.
The bill provides for a comprehensive mechanism to ban unregulated deposit schemes and to protect the interests of depositors.
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 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 provides for the appointment of government officers not below the rank of Secretary to the state or central government as the Competent Authority.The Authority will have powers similar to those vested in a civil court.
The Authority may (a)provisionally attach the property of the deposit taker, as well as all deposits received (b)summon and examine any person it considers necessary for the purpose of obtaining evidence and (c)order the production of records and evidence.
The Bill provides for the constitution of one or more Designated Courts in specified areas.The Court will seek to complete the process within 180 days of being approached by the Competent Authority.
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.