Cabinet approves amendments to Banning of Unregulated Deposit | Daily Current Affairs 2021

Cabinet approves amendments to Banning of Unregulated Deposit

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In a move that is aimed to put an end to the hazard of illicit deposit schemes and prevent such schemes from duping the poor and gullible, Union Cabinet has approved the proposal to amend Banning of Unregulated Deposit Schemes Bill, 2018.

According to the Bill, a deposit-taking scheme will be considered unregulated if it is not registered with regulators such as Ministry of Corporate Affairs (MCA), RBI, SEBI, among others.

According to an official statement, ‘The Bill contains a substantive banning clause which bans deposit takers from promoting, operating, issuing advertisements or accepting deposits in any Unregulated Deposit Scheme. The principle is that the Bill would ban unregulated deposit taking activities altogether, by making them an offence ex-ante rather than the existing legislative-cum-regulatory framework which only comes into effect ex-post with considerable time lags’. According to the Bill, there will be three different types of offences -running of unregulated deposit schemes, fraudulent default in regulated deposit schemes, and wrongful inducement in relation to unregulated deposit schemes.

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