Cabinet clears amendments to Banning of Unregulated Deposit

1 min read
  1. The Banning of Unregulated Deposit Schemes Bill 2018 was introduced in Parliament on July 18, 2018 which bans unregulated deposit scheme not registered with the government.
  2. The bill will effectively tackle the menace of illicit deposit-taking activities and prevent such schemes from duping poor and gullible people .
  3. The principle is that the bill will consider unregulated deposit scheme as an offence based on forecast rather than the existing legislative-cum-regulatory framework that only comes into effect post event with considerable time lags.
  4. The Bill creates three different types of offences: (i) running of unregulated deposit schemes, (ii) fraudulent default in regulated deposit schemes, and (iii) wrongful inducement.
  5. It also seeks to amend three laws, including the Reserve Bank of India Act, 1934 and the Securities and Exchange Board of India Act, 1992
  6. Bill provides for attachment of properties/assets and subsequent repayment to depositors.
    with severe punishment and heavy pecuniary fines .