The Banning of Unregulated Deposit Schemes Act, 2019

THE FIRST SCHEDULE

[See section 2 (15)]

REGULATED DEPOSIT SCHEMES

(1) The Regulator and Regulated Deposit Scheme refers to the regulators and schemes and

arrangements listed in the following Table, namely:—

TABLE

Sl. No. Regulator Regulated Deposit Scheme

(1) (2) (3)
1. The Securities and Exchange

Board of India

(i) Any scheme or an arrangement

[as defined under section 11AA of

the Securities and Exchange Board

of India Act, 1992 (15 of 1992)]

launched, sponsored or carried out

by a Collective Investment

Management Company registered

with the Securities and Exchange

Board of India under the Securities

and Exchange Board of India

(Collective Investment Scheme)

Regulations, 1999.

  (ii) Any scheme or an arrangement

registered with the Securities and

Exchange Board of India under the

Securities and Exchange Board of

India (Alternative Investment

Funds) Regulations, 2012.

  (iii) Any scheme or an

arrangement, pursuant to which

funds are managed by a portfolio

manager, registered under the

Securities and Exchange Board of

India (Portfolio Managers)

Regulations, 1993.

  (iv) Any scheme or an arrangement

regulated under the Securities and

Exchange Board of India (Share

Based Employee Benefits)

Regulations, 2014 or providing for

employee benefits as permitted

under the Companies Act, 2013 (18

of 2013).

  (v) Any other scheme or an

arrangement registered under the

Securities and Exchange Board of

India Act, 1992 (15 of 1992), or the

regulations made thereunder.

(1) (2) (3)
  (vi) Any amount received as

contributions in the nature of

subscriptions to a mutual fund

registered with Securities and

Exchange Board of India under the

Securities and Exchange Board of

India (Mutual Funds) Regulations,

1996.

2. The Reserve Bank of India (i) Any scheme under which

deposits are accepted by

Non-Banking Financial Companies

as defined in clause (f) of section

45-I of the Reserve Bank of India

Act, 1934 (2 of 1934) and

registered with the Reserve Bank

of India; or any other scheme or an

arrangement registered under the

Reserve Bank of India Act, 1934.

  (ii) Any scheme or an arrangement

under which funds are accepted by

individuals or entities engaged as

Business Correspondents and

Facilitators by banks subject to the

guidelines and circulars issued by

the Reserve Bank of India from

time to time.

  (iii) Any scheme or an arrangement

under which funds are received by

a system provider operating as an

authorised payment system under

the Payment and Settlement

Systems Act, 2007 (51 of 2007).

  (iv) Any other scheme or an

arrangement regulated under the

Reserve Bank of India Act, 1934 (2

of 1934), or the guidelines or

circulars of the Reserve Bank of

India

3.

The Insurance

Regulatory and

Development

Authority of India

A contract of insurance pursuant to

a certificate of

registration obtained in accordance

with the Insurance

Act, 1938 (4 of 1938).

4. The State Government

or Union territory

Government

(i) Any scheme or an arrangement

made or offered by a co-operative

society registered under the Co-

operative Societies Act, 1912 (2 of

1912) or a society being a society

registered or deemed to be

registered under any law relating to

co-operative societies for the time

being in force in any State or

Union territory

(1) (2) (3)

  (ii) Any scheme or an arrangement

commenced or conducted as a chit

business with the previous sanction

of the State Government in

accordance with the provisions of

the Chit Funds Act, 1982 (40 of

1982).

  (iii) Any scheme or an arrangement

regulated by any enactment

relating to money lending which is

for the time being in force in any

State or Union territory.

 (iv) Any scheme or an arrangement

by a prize chit or money circulation

scheme under section 11 of the

Prize Chits and Money Circulation

Schemes (Banning) Act, 1978 (43

of 1978).

5. The National

Housing Bank

Any scheme or an arrangement for

acceptance of deposits registered

under the National Housing Bank

Act, 1987 (53 of 1987).

6. The Pension Fund Regulatory and

Development Authority

Any scheme or an arrangement

under the Pension Fund Regulatory

and Development Authority Act,

2013 (23 of 2013).

7.

The Employees' Provident Fund

Organisation

Any scheme, Pension Scheme or

Insurance Scheme framed under

the Employees' Provident Fund and

Miscellaneous Provisions Act,

1952 ( 19 of 1952).

8. The Central Registrar, Multi-State

Co- operative Societies

Any scheme or an arrangement for

acceptance of deposits from voting

members by a Multi-State Co-

operative Society registered under

the Multi-State Co-operative

Societies Act, 2002 (39 of 2002).

9. The Ministry of Corporate Affairs,

Government of India

(i) Deposits accepted or permitted

under the provisions of Chapter V

of the Companies Act, 2013 (18 of

2013).

  (ii) Any scheme or an arrangement

under which deposits are accepted

by a company declared as a Nidhi

or a Mutual Benefit Society under

section 406 of the Companies Act,

2013 (18 of 2013).

(2) The following shall also be treated as Regulated Deposit Schemes under this Act, namely:—

(a) deposits accepted under any scheme or an arrangement registered with any regulatory body in

India constituted or established under a statute; and

(b) any other scheme as may be notified by the Central Government under this Act.

THE SECOND SCHEDULE

(See section 42)

AMENDMENTS TO CERTAIN ENACTMENTS

PART I

AMENDMENT TO THE RESERVE BANK OF INDIA

ACT, 1934

Amendment of section 45-I of Act 2 of 1934.In the Reserve Bank of India Act, 1934, in

section 45-I, in clause (bb), after Explanation II, the following Explanation shall be inserted,

namely:—

“Explanation III.—The amounts accepted by a co-operative society from the members or

shareholders, by whatever name called, but excluding the amounts received as share capital, shall be

deemed to be deposits for the purposes of this clause, if such members or shareholders are nominal or

associate members, by whatever name called, who do not have full voting rights in the meetings of

such co-operative society.”.

PART II

AMENDMENTS TO THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992

In the Securities and Exchange Board of India Act, 1992,—

Amendment of section 11 of Act 15 of 1992. — (i) in section 11, in sub-section (4), for

clause (e), the following clause shall be substituted, namely:—

“(e) attach, for a period not exceeding ninety days, bank accounts or other property of any

intermediary or any person associated with the securities market in any manner involved in violation

of any of the provisions of this Act, or the rules or the regulations made thereunder:

Provided that the Board shall, within ninety days of the said attachment, obtain confirmation of the

said attachment from the Special Court, established under section 26A, having jurisdiction and on

such confirmation, such attachment shall continue during the pendency of the aforesaid proceedings

and on conclusion of the said proceedings, the provisions of section 28A shall apply:

Provided further that only property, bank account or accounts or any transaction entered therein, so

far as it relates to the proceeds actually involved in violation of any of the provisions of this Act, or

the rules or the regulations made thereunder shall be allowed to be attached.”;

(ii) in section 28A, after Explanation 3, the following Explanation shall be inserted, namely:—

“Explanation 4.—The interest referred to in section 220 of the Income-tax Act, 1961 shall

commence from the date the amount became payable by the person.”.

PART III

AMENDMENT TO THE MULTI-STATE CO-OPERATIVE SOCIETIES ACT, 2002

Amendment of section 67 of Act 39 of 2002. —In the Multi-State Co-operative Societies Act,

2002, in section 67, in sub-section (1),—

(a) after the words “receive deposits”, the words “from its voting members” shall be inserted;

(b) the following Explanation shall be inserted, namely:—

“Explanation.—For the removal of doubts, it is hereby clarified that a multi-State co-operative

society shall not be entitled to receive deposits from persons other than voting members.”.

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