The Union Cabinet on Wednesday approved the proposal to amend Banning of Unregulated Deposit Schemes Bill, 2018. The 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. As per the proposed 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.
Union Law Minister Ravi Shankar Prasad in a tweet said that this will help Lakhs of poor people and save their hard earned money from chit funds etc.
#Cabinet today approved amendments in Banning of Unregulated Deposit Schemes Bill to penalize those who run unregistered deposit schemes. This will help Lakhs of poor people and save their hard earned money from chit funds etc. #ModiStopsChitFundScams pic.twitter.com/t1dBU6vJQz
— RSPrasad Office (@OfficeOfRSP) February 6, 2019
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,” a government release said.
The release further stated that “There will be severe punishment and heavy fines for deposit takers violating the rules“.
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.
The banning of Unregulated Deposit Schemes Bill, 2018 was introduced in Parliament on 18th July 2018 and was referred to the Standing Committee of Finance, which submitted its report to the Parliament on January 3 this year.
As per RBI data, from July 2014 to May 2018, 978 cases of unauthorized schemes were discussed in the State Level Coordination Committee (SLCC) meetings in various states and were given to the respective law enforcement.
Apart from this, the Union Cabinet has cleared the way for many bills on Wednesday including- amendments in the Cinematography Act, making penal provisions against unauthorized camcording and digital duplication and piracy.
The Cabinet also approved setting up of Rashtriya Kamdhenu Aayog to develop, frame policies and create livelihood opportunities around the cattle resources of India. This was promised in the Budget. Union Cabinet also approved the abolition of Income Tax Ombudsman and Indirect Tax Ombudsman.
The Union Cabinet on Wednesday also approved Agri-Market Infrastructure Fund with a corpus of ₹2000 Crore. It will be utilized for developing & upgrading rural Agriculture Markets.