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Deposits ordinance does not cover gold schemes
Why is it in the news?
- As per the tax practitioners, Banning of Unregulated Deposit Scheme Ordinance will not affect the ongoing monthly schemes operated by jewellery and chit fund firms.
More in the news
- Banning of Unregulated Deposit Scheme Ordinance’, it was promulugated by President last month, to save gullible investors from losing money to Ponzi and fake deposit schemes.
- The ordinance makes such unregulated deposit schemes punishable, among other things.
- Unregulated Deposit Scheme will mean a Scheme or an arrangement under which deposits are accepted or solicited by any deposit taker by way of business and which is not a Regulated Deposit Scheme.
- Regulated Deposit Scheme will essentially comprise of schemes that fall under any one of the regulators such as RBI, IRDA, State government etc.
- Salient Features of Banning of Unregulated Deposit Schemes Ordinance 2019:(1) The ban on unregulated deposits and its promotion is expected put a closure to this illicit activity.Any deposit scheme not registered with the government would be treated as an unregulated deposit scheme and would, as such, be banned.(2) The Ordinance has provisions which ban deposit takers from promoting, operating or accepting deposits in any unregulated deposit scheme.(3) Many depositors have been taken for a ride by illicit entities running such scheme and duping people.