The Ministry of Finance has notified the rule for Banning of Unregulated Deposit Scheme. It is aimed at tackling the menace of illicit deposit-taking activities in the country.

  • The Banning of Unregulated Deposit Schemes Act, 2019 will provide comprehensive legislation to deal with the menace of illicit deposit schemes in the country.
  • The Act 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 Act 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.
  • The Act creates three different types of offences, namely, running of Unregulated Deposit Schemes, fraudulent default in Regulated Deposit Schemes, and wrongful inducement in relation to Unregulated Deposit Schemes.
  • The Act provides for attachment of properties/ assets by the Competent Authority, and subsequent realization of assets for repayment to depositors.
  • The Act enables the creation of an online central database, for collection and sharing of information on deposit-taking activities in the country.

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