CLL_Art629 - Taxpublishers.in

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The Tax Publishers Banning of Unregulated or Ponzi Deposit Schemes: Investor Friendly Proclamation Pragya Lalwani The Banning of Unregulated Deposit Schemes Ordinance, 2019 has been introduced to curb the illicit and ponzi deposit schemes in India which had lead to exploit regulatory gaps so far as the same are now punishable. Learned author in this article highlights the prohibited activities, authorities constituted, compliances to be made by deposit takers, etc. in light of the Ordinance. 1. Purpose of the Ordinance An ordinance has been promulgated by the President of India namely Banning of Unregulated Deposit Schemes Ordinance, 2019 (Ordinance, in short) in order to ban the ponzi schemes. The objective of the Ordinance is to provide a comprehensive mechanism for banning of the unregulated deposit schemes so as to protect the interest of depositors and matters connected therewith. It also seeks to amend certain enactments viz., SEBI Act, 1992, RBI Act, 1934 and Multi State Cooperative Societies Act, 2002. 2. Meaning of unregulated deposit scheme Unregulated deposit scheme means a Scheme or an arrangement under which deposits are accepted or solicited by any deposit taker by way of business and which is not a regulated deposit scheme as specified under First Schedule to the Ordinance. All the deposit schemes have to get registered with relevant regulators as are mentioned in the Schedule so as to be called as regulated deposit schemes. A prize chit or a money circulation scheme banned under the provisions of the Prize Chits and Money Circulation Scheme Banning Act, 1978 would be deemed to be an unregulated deposit scheme under the Ordinance. 3. Prohibitory provisions as to unregulated deposit scheme As per the Ordinance, the unregulated deposit schemes shall be totally banned from 21-2-2019. It seeks to prohibit following activities: SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Banning of Unregulated or Ponzi Deposit Schemes: Investor Friendly Proclamation

Pragya Lalwani

The Banning of Unregulated Deposit Schemes Ordinance, 2019 has been introduced to curb the illicit and ponzi deposit schemes in India which had lead to exploit regulatory gaps so far as the same are now punishable. Learned author in this article highlights the prohibited activities, authorities constituted, compliances to be made by deposit takers, etc. in light of the Ordinance.

1. Purpose of the Ordinance

An ordinance has been promulgated by the President of India namely Banning of Unregulated Deposit Schemes Ordinance, 2019 (Ordinance, in short) in order to ban the ponzi schemes. The objective of the Ordinance is to provide a comprehensive mechanism for banning of the unregulated deposit schemes so as to protect the interest of depositors and matters connected therewith. It also seeks to amend certain enactments viz., SEBI Act, 1992, RBI Act, 1934 and Multi State Cooperative Societies Act, 2002.

2. Meaning of unregulated deposit scheme

Unregulated deposit scheme means a Scheme or an arrangement under which deposits are accepted or solicited by any deposit taker by way of business and which is not a regulated deposit scheme as specified under First Schedule to the Ordinance. All the deposit schemes have to get registered with relevant regulators as are mentioned in the Schedule so as to be called as regulated deposit schemes.

A prize chit or a money circulation scheme banned under the provisions of the Prize Chits and Money Circulation Scheme Banning Act, 1978 would be deemed to be an unregulated deposit scheme under the Ordinance.

3. Prohibitory provisions as to unregulated deposit scheme

As per the Ordinance, the unregulated deposit schemes shall be totally banned from 21-2-2019. It seeks to prohibit following activities: