Real estate developers and jewellers will be in trouble now!
To curb black money and corruption, Government cleared 'Banning of Unregulated Deposit Schemes Bill, 2018' to ban unregulated deposits, by making even the act of running such Ponzi schemes an offence. The Cabinet also approved a Bill to facilitate the growth of chit funds, by distinguishing this segment from the banned “prize chits”. According to the new law, real estate developers that offer schemes with fixed returns till possession will come under "unregulated deposits".
Similarly, some jewellers, offer schemes in which the consumers pay 11 instalments while the company pay the 12th one.
Other schemes have offers where consumers pay instalments for at least 10 months and get up to 50% discounts in monthly contribution.
All these schemes will be illegal under the new law. There have been several instances in the past where government try to curb these schemes but could not succeed.
“Companies and institutions running such schemes exploit regulatory gaps and the lack of strict administrative measures to dupe poor and gullible people of their hard-earned savings,” a government statement said.
The Bill seeks to ban deposit-takers from promoting, operating, issuing advertisements or accepting deposits in any unregulated schemes.
Rose Valley, the chit fund company, is under the scanner of the ED and the Central Bureau of Investigation. The company's Chairman Gautam Kundu was arrested in Kolkata in March 2015 for running a chit fund.
A new comprehensive law would completely prohibit unregulated deposit-taking and provide for deterrent punishment for promoting or operating such schemes, besides introducing other changes, the government said.
To read the full story, Subscribe Now at just Rs 249 a month