The Banning of Unregulated Deposit Schemes Ordinance, 2019

Government has promulgated The Banning of Unregulated Deposit Schemes Ordinance, 2019 on 21st Feb, 2019 to ban unregulated deposits with immediate effect.

Regulated deposits are defined and listed in Schedule 1 of the Ordinance .All others are classified as unregulated deposits. However “deposit” is defined in Section 2(4) of the ordinance.

Among others the following are not considered as deposits

1. amounts received by way of contributions towards the capital by partners of any partnership firm or a limited liability partnership,
2. amounts received by an individual way of loan from his relatives or amounts received by way of loan from the relatives of any of its partners, (relatives as defined in Companies Act 2013.)

   Some of the Punishment for contraventions

3. Any deposit taker who contravenes the provisions of section 4 shall be punishable with imprisonment for a term which may extend to seven years, or with fine which shall not be less than five lakh rupees but which may extend to twenty-five crore rupees or three times the amount of profits made out of the fraudulent default referred to in said section, whichever is higher, or with both.

4. Any deposit taker who contravenes the provisions of section 5 shall be punishable with imprisonment for a term which shall be not less than one year but which may extend to five years with fine and which may extend to Ten Lakh rupees.
5. Whoever fails to give the intimation required under sub-section (1) of section 10 or fails to furnish any such statements, information or particulars as required under sub­section (2) of that section, shall be punishable with fine which may extend to five lakh rupees

For ordinance click Egazette nic