On 19 July 2019, the Ministry of Finance introduced “the Banning of Unregulated Deposit schemes Bill, 2019” in Lok Sabha. The bill provides for a mechanism to prohibit unregulated deposit schemes and safeguard the interests of depositors. Also, the bill will instantly handle the menace of illicit deposit-collecting activities in the country launched by rapacious operators, which currently are exploiting regulatory gaps.
It will altogether prohibit unregulated deposit-taking schemes, and the law has provisions for punishment and disgorgement or repayment of deposits in cases where such schemes nonetheless handle to raise deposits illegally.
It also seeks to amend three laws, i.e.
- the Reserve Bank of India (RBI) Act, 1934,
- the Securities and Exchange Board of India (SEBI) Act, 1992 and
- the Multi-State Co-operative Societies Act, 2002.