NEW DELHI: The government on Tuesday approved the Unregulated Deposit Schemes Bill, 2018 that seeks to ban all unregulated deposit schemes including ponzi schemes. It also proposed stringent laws to punish those who raise funds through unregulated deposits and proposed changes in Chit Fund Acts to regulate the chit fund industry.
“The Bill is aimed at tackling the menace of illicit deposit taking activities in the country,” said a note by the Cabinet Committee on Economic Affairs. According to the statement, the Bill provides for “severe punishment and heavy pecuniary fines” to act as deterrent.
The statement noted that companies and institutions running such schemes exploit existing regulatory gaps and lack of strict administrative measures to dupe poor and gullible people of their hard-earned savings.
The Bill also suggests creation of an online central database for collection and sharing of information on deposit taking activities in the country.
“The bill provides for a complete prohibition of unregulated deposit taking activity, deterrent punishment for promoting or operating an unregulated deposit taking scheme, stringent punishment for fraudulent default in repayment to depositors,” the statement issued by the finance Ministry said.
The government added the Bill would ensure designation of a competent authority by the state government to ensure repayment of deposits in the event of default by a deposit taking establishment. The powers and functions of the competent authority will include the power to attach assets of a defaulting establishment.
Besides, the Cabinet decided to make changes in the Chit Funds Act in a bid to enable greater financial access for people, the finance ministry said.
Cab approves extra-budgetary support for PMAY (U)
The Union Cabinet on Tuesday approved extra-budgetary alloca-tion for government’s flagship housing scheme Pradhan Mantri Awas Yojana (Urban), an official source said. The housing and urban affairs ministry targets construction of about 1.2 crore houses for the urban poor. The scheme got allocation of H6,505 crore for Budget 2018-19 as compared to H6,042.81 crore in 2017-18. However, additional budgetary resources of H25,000 crore was also proposed for the scheme to be raised outside the general budget.