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In a bid to crack down on ponzi and illegal deposit schemes, the Finance Ministry has revised a draft law that now proposes to rope in the Central Bureau of Investigation in such cases, giving the first charge on assets to depositors as well as setting up of an online database of information on deposit taking activity in the country.
“Several cases of illegal deposit-taking in recent years have been spread across States. To tackle such cases, the Competent Authority has been given the power to refer a case for investigation by the CBI,” said the draft “Banning of Unregulated Deposit Schemes and Protection of Depositors’ Interests Bill, 2016” (Version 2.0).
However, for a CBI investigation, the case would have to fulfil two clauses — first, the depositors, Deposit Takers or properties involved are located in more than one State in India or outside India, and second, the total value of the amounts involved is of such magnitude as to significantly affect public interest.
The earlier draft had called for investigation of certain cases by the Special Police Establishment under the Delhi Special Police Establishment Act. The Finance Ministry has sought public comments on the Bill by December 17, 2016. “Based on the comments received and further consultations with the stakeholders, the Draft Bill (that was released in March 2016) has been modified,” it said.
The Bill seeks to ban unregulated deposit schemes and protect the interests of depositors.
It has also introduced a clause to give depositors first charge on any asset created from the deposits.
“The Bill, being a social welfare legislation, prioritises the interests of depositors over others,” said the draft.
Definition refined The revised Bill has also refined the definition of deposits to mean the receipt of money as an advance or loan in any form which has to be returned after a specified time with or without any interest, bonus, profit or in any other form.
“The object of this Bill is to define the term ‘deposits’ in such a manner that deposit takers are restricted from camouflaging public deposits as receipts which are outside the purview of this Bill. But, it is not the intention of this Bill to curb acceptance of money by an establishment in the ordinary course of business,” it said.
The draft Bill has eight chapters and 40 sections. It has continued with the proposal for prison terms between one year and 10 years for various offences as well as a fine of up to ₹25 crore.
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