The Banning of Unregulated Deposit Schemes Act 2019 has received the assent of the President on the 31st July, 2019. The Act puts a comprehensive ban on unregulated deposit taking activity making it a punishable offence
The President of India on the 21st February, 2019 had promulgated the Banning of Unregulated Deposit Schemes Ordinance, 2019.
The Ordinance has been promulgated to have a central legislation to tackle the menace of illicit deposits taking activities in the country.
Presently, non-banking entities are allowed to raise deposits from the public under the provisions of various statutes enacted by the Central Government and State Governments.
However, the regulatory frame work for deposit taking activity in the country is not seamless. Despite such diverse regulatory frame work, schemes and arrangements leading to unauthorised collection of money and deposits fraudulently by inducing public to invest in uncertain schemes promising high returns or other benefits are still operating in the society.
The Ordinance ensures a comprehensive ban on unregulated deposit taking activity and for its effective enforcement.
It aims to prevent such unregulated deposit schemes or arrangements at their inception and at the same time makes soliciting, inviting or accepting deposits pursuant to an unregulated deposited scheme as a punishable offence.
The Ordinance also seeks to put in place a mechanism by which the depositors can be repaid without delay by attaching the assets of the defaulting establishments.
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