226 FAQ’s on The Banning of Unregulated Deposit Schemes Ordinance 2019

226 FAQ’s on The Banning of Unregulated Deposit Schemes Ordinance 2019

1. What is the need of the Ordinance?

The Banning of Unregulated Deposit Scheme Bill 2019 was passed by Lok Sabha but could not be passed by Rajya Sabha to make it as an enacted Act. Hence, to make the provisions effective immediately the Ordinance was promulgated by Hon’ble President of India on 21st February 2019 and is applicable from that date onwards.

2. What is the objective of this Ordinance?

The Ordinance is to provide for a comprehensive mechanism to ban Unregulated Deposit Schemes and to protect the interest of the depositors and for matters connected therewith or incidental thereto.

3. When has this Ordinance come into force?

From 21st February 2019.

4. What is appropriate government under the Ordinance?

As per Section 2(1) of the Ordinance, “appropriate Government” means in respect of matters relating to,

(i) the Union territory without legislature, the Central Government;

(ii) the Union territory of Puducherry, the Government of that Union territory;

(iii) the Union territory of Delhi, the Government of that Union territory; and

(iv) the State, the State Government

5. What is relevance of the appropriate government under the Ordinance?

“Appropriate Government” has been vested with right to appoint the authorities for administration of the Ordinance.

6. Who is the competent authority under the Ordinance?

The appropriate government would appoint one or more officers not below the rank of Secretary to that Government, as the Competent Authority under Section 7 of the Ordinance.

7. What is deposit?

Section 2(4) of the Ordinance defines the term deposit as 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. However, certain deposits are excluded from the definition and as such the excluded deposits are not within the scope of the Ordinance. Please refer Q.8 for knowing list of excluded deposits.

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