In a bid to tackle illicit deposits, the government has introduced a comprehensive bill in the parliament called
Banning of Unregulated Deposit Schemes Bill, 2018.
Why the bill is needed ?
In absence of a comprehensive central legislation, regulatory procedures and strict administrative measures the
companies/institutions dupe poor and gullible people of their hard-earned savings in the name of exciting schemes.
The Chit Funds (Amendment) Bill, 2018 was also introduced in the Lok Sabha before, the two bills including the
Banning of Unregulated Deposit Schemes Bill, 2018 are aimed at tackling the menace of illicit deposit
taking activities in the country.
What is Banning of Unregulated Deposit Schemes Bill, 2018 ?
The proposed bill is introduced to prohibit illicit deposit schemes and related activities completely. According to the bill
a "deposit taker" has to register themselves with related regulator like RBI, SEBI, the Ministry of Corporate
Affairs, and the State governments etc.
"Deposit Takers" defined as all possible entities including individuals receiving or soliciting deposits, except
specific entities such as those incorporated by legislation has to follow the rules while taking any public deposit,
failing which the same will be considered "unregulated" and hence be banned.
Three different types of offences are categorised under the bill including, running of Unregulated Deposit Schemes,
fraudulent default in Regulated Deposit Schemes, and wrongful inducement in relation to Unregulated Deposit Schemes.
The bill empowers police to search and seize any property believed to be connected with an offence under the Bill,
with or without a warrant.
A "Competent Authority" is also proposed to be appointed to have the powers similar to a civil court, while
designated courts are also suggested under the bill to tackle such cases
According to the bill an online central database will be created for collection and sharing of information on
deposit taking activities in the country.