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The Banning of Unregulated Deposit Schemes Bill, 2018
Why in news?
- The Union Cabinet on Wednesday approved the official amendments to an Act that classifies any deposit scheme not registered with the government as an offence and bans it
- Amendments to are pursuant to the recommendations of the Standing Committee on Finance.
About the bill
- Bill was introduced in Lok Sabha by the Minister of State for Finance.
- The Bill provides for a mechanism to ban unregulated deposit schemes and protect the interests of depositors.
Definition of Deposit:
- Bill defines a deposit as an amount of money received through an advance, a loan, or in any other form, with a promise to be returned with or without interest.
- Deposit may be returned either in cash or as a service and the time of return may or may not be specified.
Unregulated deposit scheme:
- A deposit-taking scheme is defined as unregulated if it is not registered with the regulators listed in the Bill.
Deposit taker:
- The Bill defines deposit takers as an individual, a group of individuals who asks to receive deposits.
Designated Courts:
- The Bill provides for the constitution of one or more Designated Courts in specified areas.
- This Court will be headed by a judge not below the rank of a district and sessions judge.
Competent Authority :
- The Bill provides for the appointment of one or more government officers, not below the rank of Secretary to the state or central government, as the Competent Authority.
- Police officers receiving information about offences committed under the Bill will report it to the Competent Authority.
Offences and penalties :
- The Bill defines three types of offences, and penalties(1) Running (advertising, promoting, operating or accepting money for) unregulated deposit schemes.(2) Fraudulently defaulting on regulated deposit schemes.(3) Wrongfully inducing depositors to invest in unregulated deposit schemes by willingly falsifying facts.
Source
The Hindu, PRS.