Why is it in the news?
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In order to deal with illegal deposit taking activities, the Union Cabinet approved amendments to the Banning of Unregulated Deposit Schemes Bill, 2018.
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These changes are based on the recommendations of the Standing Committee on Finance (SCF).
More about the scheme
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The Bill provides for severe punishment and pecuniary fines to act as deterrent for such illicit activities.
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It also has adequate provisions for disgorgement or repayment of deposits in cases where such schemes nonetheless manage to raise deposits illegally.
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A large number of such instances have been reported from the eastern part of the country.
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The Bill completely bans deposit takers from promoting, advertising or accepting deposits in any unregulated scheme.
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Three types of offences have been captured in the proposed law:(1) Running of Unregulated Deposit Schemes.(2) Fraudulent default in Regulated Deposit Schemes.(3) Wrongful inducement in relation to Unregulated Deposit Schemes.
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The Bill also provides for attachment of properties and assets of the deposit taker and subsequent realisation of assets for repayment to depositors.
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It will enable creation of an online central database, for collection and sharing of information on deposit-taking activities in India.
Source
Indian Express.