Totally ban all forms of the Unregulated Deposit Schemes.
Totally Ban Any fraudulent default in the repayment or return of deposit on maturity or in rendering any specified service promised against such deposit.
The focal point of the ordinance is to control and regulate the Unregulated Deposit Scheme.
On whom this Ordinance applicable?
This Ordinance shall apply to only those deposits taken & accepted by non-corporate entities in small amounts from multiple investors by an invitation published in a newspaper under some scheme or arrangement.
Now the question is what does mean by The UNREGULATED DEPOSIT SCHEME.
It is 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.
Why do we need this Law?
As the country progressed, some legislations were made to control the acceptance of deposits and making of loans & advances but they were applicable mostly to the organized entities like a company and an NBFC.
However, there was no legislation to regulate such deposits taken by many non-corporate entities like individual, Firm, Cooperative Societies, Trusts etc.
Banning of Unregulated Deposit Schemes Ordinance, 2019proposes to control the flow of deposits amongst non-corporate assessees.
Any specified scheme which is regulated by any of the following regulators shall be called a REGULATED DEPOSIT SCHEME.
Ministry of Corporate Affairs (MCA)
Security & Exchange Board of India (SEBI)
Reserve Bank of India (RBI)
Insurance Regulatory & Development Authority of India (IRDA)
State or UT Government
National Housing Bank (NHB)
Employees Provident Fund Organization
Pension Fund Regulatory & Development Authority of India
Central Registrar Multi-state Cooperative Societies
Deposits accepted under any scheme or an arrangement registered with any regulatory body in India constituted or established under a statute; and
Any other scheme as may be notified by the Central Government under this Ordinance.
Qualification: company secretary Company: Kamal S & Associates Location: mumbai
Member Since: 21 Feb 2019 | Total Articles Contributed:4
About Author : CS Kamal Soni is Associate Member of Institute of Companies Secretaries of India having good experience in legal and secretarial matters. he is also a post graduate in master in commerce.
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