Purpose of the
Bill-
- 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 Unregulated Deposit Scheme.
Ø On whome 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.
Ø Now the question is
what does meant 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.
Ø Why we need for 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, 2019 proposes to control the flow of deposits amongst non-corporate assessees.
Ø Any specified scheme which is
regulated by any of the following regulators shall be called a REGULATED
DEPOSIT SCHEME.
1.
Ministry of Corporate Affairs (MCA)
2.
Security & Exchange Board of India (SEBI)
3.
Reserve Bank of India (RBI)
4.
Insurance Regulatory & Development Authority of India
(IRDA)
5.
State or U T Government
6.
National Housing Bank (NHB)
7.
Employees Provident Fund Organization
8.
Pension Fund Regulatory & Development Authority of India
9.
Central Registrar Multi-state Cooperative Societies
10. Deposits accepted
under any scheme or an arrangement registered with any regulatory body in India
constituted or established under a statute; and
11. Any other scheme as
may be notified by the Central Government under this Ordinance.
Ø Who are the DEPOSIT TAKERS
·
Individual/group
of individual
·
association
of persons
·
company
·
partnership
firm
·
proprietorship
concern
·
limited
liability partnership
·
trust
·
co-operative society
Ø
What is DEPOSIT?
“Deposit”
means an amount of money received by way
of an advance or loan or in any other form, by any deposit taker with a promise
to return whether after a specified period or otherwise, either in cash or in
kind or in the form of a specified service, with or without any benefit in the
form of interest, bonus, profit or in any other form, but does not include
a) any amount received as loan from
a banking company.
b) any amount received as loan from
Public Financial Institutions, Reserve Bank of India or Registered NBFC
c) amounts received from Government or
any other source whose repayment is guaranteed by the Government
d) amounts received from foreign
government, foreign banks, foreign development institutions foreign citizens,
foreign authorities or person resident outside India as per the provisions of
FEMA.
e) amounts received by way of
contributions towards the capital by partners of any partnership firm or a
limited liability partnership;
f) amounts received by an individual by
way of loan from his relatives or amounts received by any firm by way of loan
from the relatives of any of its partners;
g) amounts received as credit by a
buyer from a seller on the sale of any property (whether movable or immovable);
h) amounts received by an asset
re-construction company which is registered with the Reserve Bank of India
under section 3 of the Securitisation and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002;
i)
any
amount accepted by a registered political party under section 29B of the Representation
of People Act, 1951;
j)
any
periodic payment made by the members of the self-help groups operating within
such ceilings as may be prescribed by the State Government or Union territory
Government;
k) any other amount collected for such
purpose and within such ceilings as may be prescribed by the State Government;
l)
an
amount received in the course of, or for the purpose of, business and bearing a
genuine connection to such business
including-
i.
payment, advance or part payment for the supply or hire of goods or provision
of services and is repayable in the event the goods or services are not in fact
sold, hired or otherwise provided;
ii.
advance received in connection with consideration of an immovable property
under an agreement or arrangement subject to the condition that such advance is
adjusted against such immovable property as specified in terms of the agreement
or arrangement;
iii.
security or dealership deposit for the performance of the contract for supply
of goods or provision of services; or
iv.
an advance under the long-term projects for supply of capital goods
However if the above amounts become
refundable and they are not refunded on the expiry of fifteen days, they shall
be deemed to be deposits.
Moreover if the above amounts are taken to
deal in the goods or properties or services which requires some necessary
permission or approval under any
law, such amounts shall be deemed to be deposits if the necessary
permission or approval are not obtained.
