The Banning of Unregulated Deposit Schemes Act, 2019 section 1: Short title, ext…

In force · As amended up to 2026-08

CHAPTER I PRELIMINARY 1. Short title, extent and commencement.— (1) This Act may be called the Banning of Unregulated Deposit Schemes Act, 2019. (2) It extends to the whole of India *except the State of Jammu and Kashmir. (3) It shall be deemed to have come into force on the 21st day of February, 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|(i) Any scheme or an arrangement| ||||Board of India||[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)| |---|---|---| |2.|The Reserve Bank of India|(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. (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| |3.|The Insurance|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 A contract of insurance pursuant to| ||Regulatory and|a certificate of| ||Development|registration obtained in accordance| ||Authority of India|with the Insurance| |||Act, 1938 (4 of 1938).| |4.|The State Government|(i) Any scheme or an arrangement| ||or Union territory|made or offered by a co-operative| ||Government|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)| |---|---|---| |5.|The National|(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). Any scheme or an arrangement for| ||Housing Bank|acceptance of deposits registered| |||under the National Housing Bank| |||Act, 1987 (53 of 1987).| |6.|The Pension Fund Regulatory and|Any scheme or an arrangement| ||Development Authority|under the Pension Fund Regulatory| |||and Development Authority Act,| |||2013 (23 of 2013).| ||The Employees' Provident Fund|Any scheme, Pension Scheme or| |7.|Organisation|Insurance Scheme framed under| |||the Employees' Provident Fund and| |||Miscellaneous Provisions Act,| |||1952 ( 19 of 1952).| |8.|The Central Registrar, Multi-State|Any scheme or an arrangement for| ||Co- operative Societies|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,|(i) Deposits accepted or permitted| ||Government of India|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 cooperative 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.". _______

Source: India Code