Public Comments on “Banning of Unregulated Deposit Schemes and Protection of Depositors Interests Bill 2016″ [F.No.6/8/2015-BO.II, Ministry of Finance, Department of Financial Services Date: 17th November, 2016]

INVITATION FOR COMMENTS

A copy of the “Banning of Unregulated Deposit Schemes and Protection of Depositors’ Interests Bill, 2015”, along with the Report of the Inter-Ministerial Group (IMG) for identifying gaps in the existing regulatory framework for deposit-taking activities and to suggest administrative/ legislative measures including formulation of a new law to cover all relevant aspects of ‘deposit-taking’, was placed on the website of the Department of Financial Services (DFS) in March, 2016 for eliciting public comments.

Based on the comments received and further consultations with the stakeholders, the Draft Bill has been modified.

The revised Draft “Banning of Unregulated Deposit Schemes and Protection of Depositors’ Interests Bill, 2016” (Version 2.0), is being uploaded on the website of the Department of Financial Services for public comments. It is requested that comments / inputs/ suggestions on the Draft Bill, may be sent to the Department of Financial Services on or before 17th December, 2016 by email to feedback-banningbill@gov.in. The draft contains following chapters:

CHAPTER I: PRELIMINARY

  1. Short title, extent and commencement
  2. Definitions

CHAPTER II: DEPOSITS

  1. Deposit
  2. Amounts not to be treated as Deposits
  3. Regulated Deposit Scheme
  4. Unregulated Deposit Scheme

CHAPTER III: AUTHORITIES

  1. Competent Authority
  2. Designated Court

CHAPTER IV: OFFENCES

  1. Banning of Unregulated Deposit Schemes
  2. Contravention of Section 9
  3. Fraudulent default in Regulated Deposit Schemes
  4. Wrongful inducement in relation to unlawful schemes
  5. Punishment for repeat offenders
  6. Offences by Deposit Takers other than individuals

CHAPTER V: PROCEDURE REGARDING OFFENCES

  1. Offences to be cognizable
  2. Competent Authority to be informed of offences
  3. Investigation of offences by the Central Bureau of Investigation
  4. Power to enter, search and seize without warrant
  5. Application of the Code to proceedings before the Designated Court

CHAPTER VI: INFORMATION ON DEPOSIT TAKING ACTIVITY

  1. Central Database
  2. Intimation of business by Deposit Taker
  3. Information to be shared

CHAPTER VII: RESTITUTION OF DEPOSITORS

  1. Depositors’ claims to be first charge
  2. Power of Competent Authority to provisionally attach properties
  3. Precedence of Attachment
  4. Application for confirmation of attachment
  5. Confirmation of attachment by Designated Court
  6. Attachment of property of mala fide transferees
  7. Payment in lieu of attachment
  8. Powers of the Designated Court
  9. Power of the Supreme Court to transfer cases

CHAPTER VIII: MISCELLANEOUS

  1. Appeal
  2. Publication of advertisement of any Unregulated Deposit Scheme
  3. Act to override other laws
  4. Application of other laws not barred
  5. Protection of action taken in good faith
  6. Power to make rules
  7. Power to remove difficulties and issue clarifications
  8. Power to amend Schedule I
  9. Amendments to certain enactments

SCHEDULE – I & SCHEDULE – II

Banning of Unregulated Deposit Schemes and Protection of Depositors Interests Bill 2016