Rajya Sabha passes Bill to regulate unregulated deposit schemes

The Rajya Sabha on Monday passed the Bill that seeks to regulate unregulated deposit schemes and protect the interests of depositors.

With the approval of the Rajya Sabha, the Unregulated Deposit Schemes Bill, 2019 got the nod of Parliament as it has already been passed by the Lok Sabha.

"The Bill will help protect the interests of poor people and their hard-earned money. The depositors have been given a top priority in the Bill," Minister of State for Finance Anurag Thakur said while replying to the debate on the Bill.

He said the Bill after becoming an Act will work as a crackdown on Ponzi schemes as the government has constituted an inter-ministerial group to address gaps in existing legislation.

"The recommendations included a new Central law to tackle these schemes. The problem of Ponzi schemes is across the country. Therefore, this bill will ensure no one can run after taking the money of poor people," he said and thanked the political parties for supporting the Bill cutting across the party lines.

However, CPI-M's E Karim moved a resolution opposing the ordinance route taken by the government to bring this bill, but added that he does not question the merit of the Bill.

Participating in the debate, Congress' T Subbirami Reddy applauded the Bill saying it will ensure action against those who indulge in the wrong practice of running Ponzi schemes.

"I agree with the various clauses of the Bill, but mere banning of unregulated deposits will not solve the purpose. There should be simplified norms and rules to be issued by the state government and the Central government," he said.

Reddy said conferring powers and functions upon the competent authority including the power to attach assets of a defaulting establishment is also "very good".

The former Union Minister said the Non-Banking Financial Compes (NBFCs) are in a bad position and the government should bring in some scheme to help the NBFC sector.

"There has been a lot of confusion going on in the NBFC sector. NBFC is very, very important in the growth of Indian economy. No doubt, there were some unscrupulous people, who have misused it. Banks have also suffered."

"The Reserve Bank of India (RBI) has been putting a lot of conditions on NBFC schemes. Still, I would like to draw the attention of the Finance Ministry to see to it that NBFC's problems are solved and they are made use of in the growth of the Indian economy," he said.

Supporting the Bill, BJP's Suresh Prabhu said the government has to ensure that no one is taken for a ride.

"This particular legislation, which is very comprehensive, deals with all those schemes which really do not come under any regulator as mentioned. Therefore, it is actually a very welcome Bill. The deposit mobilisation is a necessity for the economy," he said.

Trinamool's Derek O' Brien too supported the Bill, saying that it will bring an end to the loot of people's hard-earned money done through Ponzi schemes.

"This is a good Bill and has been scrutinised. 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.

"Lots of poor people were duped because of ponzi scams. The Bengal government in the last five to six years has come out with a commission to return the money to those who were duped," he added.

YSRCP's Vijaysai Reddy said the Bill has various good features like the central database where information can be shared to prevent repeat offenders from committing crimes.

RJD's Manoj Kumar Jha said the Bill was a good move to deal with Ponzi schemes and hailed the government, saying there was a need for such a mechsm to put an end on such schemes.

The Banning of Unregulated Deposit Schemes Bill provides for attachment of properties or assets and subsequent realisation of assets for repayment to depositors.

The Bill also proposes adequate provisions for repayment of deposits in cases where such schemes nonetheless manage to raise deposits illegally.

( With inputs from ANI )