Interview Guidance Program (IGP) for UPSC CSE 2024, Registrations Open Click Here to know more and registration
- The Rajya Sabha has passed the Banning of Unregulated Deposit Schemes Bill, 2019. It seeks to tackle the problem of illicit deposit taking activities in India and protect the interests of depositors.
- According to the bill, a scheme is unregulated if it is not registered with the regulators listed in the Bill. There are several regulators; For example: a) Reserve Bank of India (RBI) regulates deposits accepted by non-banking financial companies, b) Securities and Exchange Board of India (SEBI) regulates collective Investment Schemes, c) Ministry of Corporate Affairs regulate deposit taking activities by companies other than NBFCs and d) state and union territory governments regulate chit funds and money Circulation Schemes.
- The bill creates three different 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 complete prohibition on promoting, operating, issuing advertisements or accepting deposits in any Unregulated Deposit Scheme. It bans the unregulated deposit-taking activities by making the offence ex-ante i.e. based on assumption and prediction.
- It also provides for severe punishment ranging from 1 year to 10 years and pecuniary fines ranging from Rs 2 lakh to Rs 50 crore to act as deterrent.
- The bill also provides for attachment of properties or assets and subsequent realisation of assets for repayment to depositors. Clear-cut timelines have been provided for attachment of property and restitution to depositors.
- It also provides for a Competent Authority by the State Government to ensure repayment of deposits in the event of default by a deposit taking establishment.
Discover more from Free UPSC IAS Preparation Syllabus and Materials For Aspirants
Subscribe to get the latest posts sent to your email.
