Banning of Unregulated Deposit Schemes and Protection of Depositors’ Interests Bill, 2015 - (03 May 2016)

MANU/PIBU/0414/2016

Banking

The suggestion period for ‘Banning of Unregulated Deposit Schemes and Protection of Depositors’ Interests Bill’ may have closed on 30 April 2016, but what do the proposals promise?

The Bill is a culmination of measures suggested by an Inter-Ministerial Group identifying gaps in the existing regulatory framework for ‘deposit taking’. Basically, it bans entities not supervised by any regulator or government body from taking deposits.

Unregulated deposit schemes, like pyramid schemes, have been used to swindle depositors out of enormous sums of money. The Saradha chit fund in West Bengal and PACL are examples of schemes that have solicited thousands of crores of rupees from investors looking for ‘big returns’ in a short time. The schemes are usually allied with other ‘promises’ such as a job or property to lure investors.

Tags : UNREGULATED DEPOSITS PYRAMID SCHEMES