Government bans unregulated deposit schemes

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In a bid to clamp down on Ponzi and fake deposit schemes, the government has, through an ordinance, banned unregulated deposit schemes.

Key Facts;

  • The Banning of Unregulated Deposit Schemes Ordinance 2019 states that any deposit scheme not registered with the government would be treated as an unregulated deposit scheme and would, as such, be banned.
  • This extends to the entire country except Jammu and Kashmir and is to come into force immediately.
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  • No deposit taker shall directly or indirectly promote, operate, issue any advertisement soliciting participation or enrolment in or accept deposits in pursuance of an unregulated deposit scheme.
  • The ordinance has separate penalties for those who solicit deposits for an unregulated scheme, those who accept such deposits, and those who then fraudulently default on repaying the depositors.

Source:The Hindu

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