Latest News

  • Home
  • National
  • Unregulated Deposit Ordinance bans only Ponzi schemes not regulated deposits
Unregulated Deposit Ordinance bans only Ponzi schemes not regulated deposits
Monday, February 25, 2019 IST
Unregulated Deposit Ordinance bans only Ponzi schemes not regulated deposits

To curb menace of Ponzi schemes, President Ram Nath Kovind last week promulgated the Banning of Unregulated Deposit Scheme Ordinance 2019.

 
 

The Banning of Unregulated Deposit Ordinance puts a check only on illicit deposit schemes that dupes gullible investors but it does not prohibit those regulated by law like chit funds. 
 
To curb menace of Ponzi schemes, President Ram Nath Kovind last week promulgated the Banning of Unregulated Deposit Scheme Ordinance 2019 which seeks to make such unregulated deposit scheme punishable, among other things. 
 
In a series of tweets, the Department of Financial Services said: "Banning of Unregulated Deposit Ordinance-2019, exempts Individual, Firm, Companies & LLP etc. for taking any loan and deposit for their course of business as per section 2(4) e,f,l and other provisions." 
 
The clarification comes amid rumours that deposits under chit funds and loans taken by small businesses from unrelated parties and enterprises are also prohibited. 
 
However, "Chit fund is regulated by Chit Fund Act, 1982 and is treated as Regulated Deposit as per Schedule 1 of Banning of Unregulated Deposit Ordinance, 2019," it said. 
 
According to the Ordinance, the amounts received by way of contributions towards the capital by partners of any partnership firm or a limited liability partnership are exempt. 
 
Besides, amount received by an individual by way of loan from his relatives or amount received by any firm by way of loans from relatives of any of its persons are exempt among other exemptions. 

 
 

The Lok Sabha passed the Bill to this effect on the last day of the budget session by a voice-vote, but the legislation could not get the approval of the Rajya Sabha. So, the law was enforced in the form of Ordinance last week aimed at saving poor and financially illiterate of their hard earned savings from ponzi schemes like Saradha and Rose Valley. 
 
The legislation contains a substantive banning clause which bans deposit takers from promoting, operating, issuing advertisements or accepting deposits in any unregulated deposit scheme. 
 
"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 said. 
 
The law also proposes to create 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 Ordinance also provides for severe punishment ranging from 1 year to 10 years and pecuniary fines ranging from Rs 2 lakh to Rs 50 crore to act as deterrent. It also has adequate provisions for disgorgement or repayment of deposits in cases where such schemes nonetheless manage to raise deposits illegally. 
 
The law provides for attachment of properties or assets and subsequent realisation of assets for repayment to depositors. Clear-cut timelines have been provided for attachment of property and restitution to depositors. 
 

 
 
 
 
 

Related Topics

 
 
 

Trending News & Articles

 Article
Here is the full list of 827 porn websites banned by the DoT

While the Uttarakhand High Court has asked to block 857 websites, the Ministry of Electronics and IT (Meity) found 30 portals without any pornographic content. ...

Recently posted . 61K views . 1 min read
 

 Article
Class XII Boys Raped 16-Year-old in Dehradun School After Watching Porn on Phone: Police

The four boys as well as five school officials, including the director and principal, were arrested after the incident. The minors were presented before the Juvenil...

Recently posted . 8K views . 1 min read
 

 Article
Sept 27,2001 Rahul Gandhi and his girl friend Veronique,was arrested in Logan airport in Boston

Rahul was having an Italian passport and was carrying suitcase full of dollars. Some say it was about was it $2 million. Rahul and his girl friend was th...

Recently posted . 7K views . 7 min read
 

 Article
TOP 10 GYM EQUIPMENT BRANDS IN INDIA 2017

True – Tr...

Recently posted . 6K views . 83 min read
 

 
 

More in National

 Article
Are RSS's fears about Tik Tok true? Here's what you should know

Swadeshi Jagran Manch has flagged security, business and social risks posed by Chinese apps such as TikTok. The RSS fears may not be totally unfounded.

Recently posted. 702 views . 1 min read
 

 Article
After Rajdhanis, Durontos, revamped menu with combo meals for Shatabdis; binge on chhola bhatura, rajma chawal

New meals on Shatabdi Express trains: After revamping the menu on several Rajdhani and Duronto Express trains, IRCTC is all set to introduce combo meals on select...

Recently posted. 753 views . 1 min read
 

 Article
Indoor pollution killed over 1.24 lakh across India in 2015, says Lancet report

  Indoor air pollution was linked to over 1.24 lakh deaths across India in 2015, a report published in Lancet – a noted medical journal ...

Recently posted. 680 views . 6 min read
 

 Video
Funeral at the airpot



Recently posted . 1K views
 

 Video
surgical Strike



Recently posted . 1K views
 

 Photo
Fascinating facts about India



Recently posted . 1K views
 

 Article
Manisha Koirala, After Battling Cancer, Shares The Book of Untold Stories

Manisha, who was diagnosed with cancer in 2012, will be authoring the book about the experience of surviving the illness.  

Recently posted. 651 views . 1 min read
 

 Article
Brave Afghan Policeman Hugs Suicide Bomber, Explosion Kills Him But Saves Others

There are only a handful who are selfless enough to sacrifice their own life to save others. And among those few gems is Lieutenant Sayed Basam Pacha didn't f...

Recently posted. 1K views . 2 min read
 

 
 
 

   Prashnavali

  Thought of the Day

"Life has two rules: #1 Never quit #2 Always remember rule # 1."
Anonymous

Be the first one to comment on this story

Close
Post Comment
Shibu Chandran
2 hours ago

Serving political interests in another person's illness is the lowest form of human value. A 70+ y old lady has cancer.

November 28, 2016 05:00 IST
Shibu Chandran
2 hours ago

Serving political interests in another person's illness is the lowest form of human value. A 70+ y old lady has cancer.

November 28, 2016 05:00 IST
Shibu Chandran
2 hours ago

Serving political interests in another person's illness is the lowest form of human value. A 70+ y old lady has cancer.

November 28, 2016 05:00 IST
Shibu Chandran
2 hours ago

Serving political interests in another person's illness is the lowest form of human value. A 70+ y old lady has cancer.

November 28, 2016 05:00 IST


ads
Back To Top