Banning of Unregulated Deposit Schemes Bill, 2019
Published: July 25, 2019
The Lok Sabha has passed the Banning of Unregulated Deposit Schemes Bill, 2019. This bill aims to curb the menace of non regulated financial schemes in the country and will authorize the government to effectively seize the immovable and movable assets of any financial defaulters who may escape from the country.
What is in the bill?
- The bill bans all the Unregulated Deposit Schemes (mainly Ponzi frauds).
- It specifies that an Unregulated Deposit Scheme is a scheme or an arrangement in which the deposits are accepted or solicited by any deposit taker by way of business and which is not a Regulated Deposit Scheme (RDS).
- It clearly specifies that no deposit taker shall, directly or indirectly, promote, issue any advertisement or operate any scheme which solicits the participation or enrolment in or accept deposits for any Unregulated Deposit Scheme.
- A prize chit or a money circulation scheme which has been banned under the provisions of the Prize Chits and Money Circulation Scheme (Banning) Act, 1978 shall also be deemed as an Unregulated Deposit Scheme under this Act.
- It will initially extend to all of India except the state of Jammu and Kashmir.
Why was this necessary?
Currently, the Ponzi schemes are regulated by various State Acts hence they fall under the control of the State government. This allowed the states to modify any rule of unregulated financial schemes. There are currently 326 unauthorized schemes running in West Bengal alone. When this bill will be passed, the states will not be able to set the rules.
Category: Government Schemes Current Affairs