Aiming to curb the menace of ponzi schemes and protect gullible investors, Parliament has passed the Banning of Unregulated Deposit Schemes Bill, 2019.
The Rajya Sabha on Monday passed the bill with a voice vote. The Lok Sabha had given its approval to the draft legislation on July 24.
Replying to members on the bill, Minister of State for Finance Anurag Singh Thakur said that the legislation will protect the hard earned money of the poor people who are cheated and misled through the illicit deposit schemes.
He said that the bill had been unanimously supported by members in the Lok Sabha and its passing in the Rajya Sabha will be a beginning to protect gullible investors. He noted the overwhelming support for the bill in the Lower House where all the amendments were withdrawn.
The Banning of Unregulated Deposit Schemes Bill, 2019 will replace the ordinance on the same.
The bill provides for a comprehensive mechanism to ban unregulated deposits other than those taken in the ordinary course of business.
It has proposed to cover advertisement and promotion of an unregulated deposit scheme, fraudulently defaulting on regulated deposit schemes and wrongfully inducing depositors to invest in unregulated deposit schemes by willingly falsifying facts.
The bill provides for varying terms of imprisonment with a maximum of 10 years besides fines.
Thakur said that a Parliamentary Standing Committee had in September, 2015 given its report after examining the efficacy of collective deposit schemes, chit funds etc.
"The Standing Committee recommended administrative and enforcement measures as well as appropriate legislative provisions through enactment of a central legislation," he said.
The bill provides for first claim of depositors on the recovered money. The junior Finance Minister said that the bill will empower both central and state governments to frame rules, adding that 978 cases have been identified. Out of these, 326 are in West Bengal alone.
On some members' reservations about bringing the ordinance, Thakur said that gullible and poor people could not have been left to be cheated. He said that investors have already been cheated of thousands of crores.
Participating in the debate, Congress leader T. Subbirami Reddy supported the bill saying it will ensure action against those running ponzi schemes.
He appreciated various clauses in the bill but said that mere banning of unregulated deposits will not serve the purpose.
"There should be simplified norms and rules to be issued by the state governments and the Central government," Reddy said.
Trinamool Congress's Derek O' Brien also supported the Bill noting that it will end the loot of people's hard-earned money through Ponzi schemes.
"This is a good bill and has been scrutinized. We welcome this bill and congratulate the Finance Minister and the Minister of State because we believe this is the way legislation should be done. This is the first bill in this session, which is going to be passed with parliamentary scrutiny," he said.
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