India, has in the recent times witnessed a glut of financial frauds in forms of ponzi schemes, chit fund scams etc. In order to deter the illegal operators from running such deposit schemes luring deposits and to regulate them, the government brought in the ‘Banning of Unregulated Deposit Schemes Bill, 2018’ in the Parliament. However, the same could not be passed in Rajya Sabha. Subsequently, the ‘Banning of Unregulated Deposit Scheme Ordinance, 2019’ was promulgated on February 21, 2019 and is applicable since then.
The Ordinance provides for a mechanism to completely ban unregulated deposit schemes to protect the interests of depositors and provides for stringent penalties for the offences involving wrongful inducement, solicitation or acceptance of deposits under an unregulated deposit schemes as well as fraudulent default in repayment or return under a Regulated Deposit Scheme.
The Ordinance also seeks to amend three laws, i.e., the Reserve Bank of India Act, 1934, the Securities and Exchange Board of India Act, 1992 and the Multi-State Co-operative Societies Act, 2002.
In this regard ICAI has come out with FAQs on ‘The Banning of Unregulated Deposit Schemes Ordinance, 2019’.The objective of this publication is to recommend the parameters to be followed by the Chartered Accountants while rendering consultancy and services to stake holders in economic and commercial field.
For details visit: https://resource.cdn.icai.org/55285faqbudicai.pdf